UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 FORM 10-KSB/A
                                 AMENDMENT NO. 2

 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal years ended DECEMBER 31, 2002

                         Commission file number 33-31067

                             Itec Environmental Group, Inc
         ----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

           DELAWARE                                  31-1705310
           --------                                  ----------
   (State or other jurisdiction            (IRS Employer Identification No.)
      of incorporation)

                693 Hi Tech Parkway Suite 3, Oakdale, California 95361
                -------------------------------------------------
                    (Address of principal executive offices)

                                 (209) 848-3900
                                 --------------
                         (Registrant's telephone number)

Securities registered under Section 12(b) of the Exchange Act: NONE.

Securities registered under Section 12(g) of the Exchange Act:

                          COMMON STOCK, $0.001 PAR VALUE.

Check whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the Registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes [X]
No [ ]

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB/A or any amendment to this Form 10-KSB/A. [ ]

State Registrants's revenues for its most recent fiscal year: $24,000

As of December 31, 2002, 41,997,068 shares of common stock were outstanding,
andthe aggregate market value of the shares held by non-affiliates was
approximately $2,315,000.

Documents incorporated by reference:  NONE

Transitional Small Business Disclosure Format:  Yes  [   ]    No       [X]

This Report on Form 10-KSB/A contains information concerning the issuer relating
to the fiscal year ended December 31, 2002, except where otherwise indicated.

<PAGE>


                             Itec Environmental Group, Inc
                          Annual Report on Form 10-KSB/A
                                Table of Contents

PART I

ITEM 1.  DESCRIPTION OF BUSINESS .........................................   3
ITEM 2.  DESCRIPTION OF PROPERTY .........................................  16
ITEM 3.  LEGAL PROCEEDINGS ...............................................  16
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS .............  16

PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS ........  17
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION .......  18
ITEM 7.  FINANCIAL STATEMENTS ............................................  24
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                    AND FINANCIAL DISCLOSURE .............................  24

PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                    COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.....  25
ITEM 10. EXECUTIVE COMPENSATION ..........................................  27
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...  30
ITEM 12. CERTAIN BUSINESS RELATIONSHIPS AND RELATED TRANSACTIONS .........  31
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K..  32
            CERTIFICATIONS
ITEM 14. CONTROLS AND PROCEDURES .........................................  33

SIGNATURES ...............................................................  34


                                       2



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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

Special Note Regarding Forward-Looking Statements

Certain statements in this Annual Report on Form 10-KSB/A (this "Form
10-KSB/A"), including statements under "Item 1. Description of Business," "Item
3. Legal Proceedings" and "Item 6. Management's Discussion and Analysis",
constitute "forward looking statements" within the meaning of Section 27A of the
Securities Act of 1934, as amended, and the Private Securities Litigation Reform
Act of 1995 (collectively, the "Reform Act"). Certain but not necessarily all,
of such forward-looking statements can be identified by the use of
forward-looking terminology such as "believes", "expects", "may", "will",
"should" or "anticipates" or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy that involve risks and
uncertainties. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of Itec Environmental Group, Inc. (f/k/a Beechport Capital
Corp.) or its wholly-owned subsidiary, ECO2 Environmental Systems, Inc., a
Delaware corporation ("ECO2") (collectively "the Company", "we" or "us") to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. References in this Form
10-KSB/A, unless another date is stated, are to December 31, 2002.

Background

We were incorporated under the laws of the State of Colorado on January 24, 1989
under the name Coalmont, Inc. We changed our name to MCC Holdings, Inc. on
August 14, 1992, and changed it again to Beechport Capital Corp. on January 10,
1996. We were originally formed for the primary purpose of seeking out
acquisitions of properties, businesses or merger candidates, without limitation
as to the nature of the business operations or geographic area of the
acquisition candidate. From inception through 26 September, 1990 the date of
completion of our initial public offering of securities, our activities were
directed toward the acquisition of operating capital.

On May 11, 2001, we acquired all the issued and outstanding shares of common
stock of Itec in exchange for a total of 6,651,987 shares of our restricted
common stock. This business combination resulted in the shareholders of Itec
owning approximately 66.5% of the issued and outstanding shares of Itec's common
stock (10,000,000 shares were outstanding upon completion of the transaction),
and Itec holding 100% of the issued and outstanding shares of Itec's common
stock.

There were no consulting fees, finders fee or other compensation paid for this
business combination, outside of normal legal and accounting fees. No
officers/directors of Beechport Capital Corp or Itec received compensation in
any form for the acquisition/merger of Beechport and Itec. There have been no
sales of securities by any of the former officers/directors of Beechport.

This transaction was a recapitalization of Itec, with no revaluation of assets
and liabilities. Beechport was a shell corporation and therefore the acquisition
was not recorded as a purchase transaction.

                                       3
<PAGE>

Itec was incorporated in March 2000 to develop and commercialize new
technologies that are economically and environmentally sound. Itec's objective
is to become a worldwide supplier of equipment for recycling oil and
agricultural chemical containers and related systems. Itec has developed a
cleaning system utilizing liquid carbon dioxide for cleaning recyclable plastic,
oil and pesticide containers called the ECO2TM Environmental System.

In October 2002, we changed our corporate name to Itec Environmental Group, Inc
and our domicile to the State of Delaware.

Our offices are located at 693 Hi Tech Parkway Suite 3, Oakdale, California
95361, our telephone number is (209) 848-3900 and our website is www.iteceg.com.

We have one subsidiary, which is wholly-owned, ECO2 Environmental Systems, and
unless the context indicates otherwise all references herein to we, us or Itec,
includes this wholly-owned subsidiary. ECO2 Environmental Systems, Inc was
formed for two reasons, the first to apply for and obtain a trademark and second
to be the marketing subsidiary of Beechport Capital Corp. before the name change
to Itec Environmental Group, Inc. ECO2 Environmental Systems, Inc was formed on
10 April, 2000 and is domiciled in Delaware. ECO2 Environmental Systems, Inc
only activities to date have been the application and receipt of the trademark
"ECO2".

The following is a list of officers and directors during the past three years:

Board of Directors
2000                    Age     Position                   Shares  % Outstanding
------------------      ---     ---------                  ------  -------------
Lawrence C. Schmelzer   64     President and Director      985,500        29.4%
Timothy J. Brasel       42     Director                    683,802        19.8%
Susan Schmelzer         37     Director                        0           0.0%

2001
----
Lawrence C. Schmelzer   65     President and Director *    985,500         6.3%
Timothy J. Brasel       43     Director               *    683,802         5.4%
Susan Schmelzer         38     Director               *        0           0.0%
Gary M DeLaurentiis     56     President and Director ** 2,354,803        15.0%
Andrea G. Videtta       44     VP      Director       **   592,027         3.8%
Lisa A. Fitzpartick     35     VP      Director       **   465,639         3.0%

2002
----
Gary M DeLaurentiis     57     President and Director    3,354,803(1)      7.8%
Andrea G. Videtta       45     VP      Director            592,027         1.4%
Lisa A. Fitzpartick     36     VP      Director            465,639         1.1%
John R. Murray          65     Director                    100,000(2)      0.2%
Michael E. Hofmann      52     Chief Financial Officer     500,000(3)      1.1%

Mr. Schmelzer cost basis for his ownership of 985,500 was $17,420, resulting in
a $0.018 per share cost basis. This was based on a purchase of 80,000 shares for
$20,000 cash and receiving 800,000 shares in a stock exchange transaction as a
result of a merger with a $1,000 net value. Of the 880,000 original shares, he
had disposed of 150,000 shares before a 1.35 to 1 stock split.

                                       4
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---------------------
(1) Includes 1,000,000 shares underlying options exercisable at $0.18 per share.
(2) Includes 100,000 shares underlying options exercisable at $0.18 per share.
(3) Includes 500,000 shares underlying options exercisable at $0.18 per share.

* Term and positions ended 4 May, 2001
** Term and positions started 4 May, 2001

Products

We operate through a European office in Naples, Italy to provide sales and
service to its Italian customers and sales of ECO2 Systems throughout Europe.

We have developed a new cost-effective, environmentally sensitive technology,
ECO2TM Environmental System, for cleaning plastic contaminated by substances
that make most types of plastic ineligible for traditional recycling programs.
The ECO2TM System consists of a washing chamber, storage tank, distilling unit,
compressor, refrigeration unit and various pumps and compressors. Each system
can process between 500 to 1,000 pounds of plastic per hour depending on the
model purchased. Used oil containers (typically the one quart size sold to
consumers) were the first focus of this new technology; however, additional
scientific testing results now indicate that the technology can be profitably
employed to recycle all plastics regardless of the contaminant. This statement
refers to the end result of the tests being equal to or exceeding the "normal"
results using water. By decreasing disposal costs of the "sludge" associated
with using water (cleaning of the wastewater before discharge) and the
reoccurring cost of chemicals vs. reusable solvent. The following companies have
provided this test data: Analytical Services Group located in Santa Clara,
California and BSK Analytical Laboratories located in Fresno, California.

The Oil that is captured during the process is picked up by local Used Oil
Collectors. Each pound of oil-contaminated plastic contains approximately 6 to 8
ounces of oil and is a significant amount. The fee to have Used Oil Collectors
pickup the used oil is reimbursed to the "Operator of the Plant", located in
California, by the California Intergraded Waste Management Board thought the
Used Oil Collection Program. The proposed plant will, when necessary, apply to
become a "Certified Collection Center". Green Flame Services
(http://www.greenflameservices.com) is the company that will deliver the ground
oil containers collected throughout California to our facility.

Several other states have programs similar to California. They include Alaska,
Arizona, Florida, Kentucky, Louisiana, Oregon and Utah. To review other related
web sites please refer to the links listed below.

http://www.astswmo.org/sw/swtf/oil/oil-issues.htm
http://www.recycleoil.org/legislative.htm
http://www.p2pays.org/ref/02/0162212.pdf
http://www.deq.state.or.us/wmc/solwaste/oilreport94.html#c
http://www.usedoilrecycling.com/index.cfm

With regard to the other contaminants collected during the process:

At our plant in Oakdale, CA Itec processed approximately 3,000 lb of plastic
using a controlled batch of ground pesticide containers, given to the Itec by
Western Ag Plastics, Delano, California. This company is the certified collector
for the Agriculture Container Recycling Council. The web site is located at

                                       5
<PAGE>

http://www.acrecycle.org/. Western Ag Plastics sent the material to Itec as
test. When the material arrived from Western Ag Plastics the material was ground
into 1/2 inch flakes and was dry and essentially had no residue remaining. This
is the normal condition that material is sent to processors for this type of
material. The purpose of using the ECO2 System is to remove the Labels and the
Odor from the plastic. After processing the material Itec collected only 10
ounces of residue after distillation of the Solvent and the CO2.

Nationally the ACRC collects approximately 9,000,000 lbs of pesticide containers
annually from various regions in the USA. If 3,000 lbs converts to 10 oz of
residue, then 9,000,000 lbs would convert to approximately 46 gallons of
residue. The cost of disposal (as per Safety Kleen) of a 55-gallon drum of this
residue is $250 because of its hazardous nature. This would equate to $0.0000278
per pound of plastic, we felt that this amount so small as to represent a zero
cost.

The contaminate residue from "milk containers", is even smaller than the
pesticide containers. This residue is not considered hazardous. Itec processed
several 3,000 pound controlled batches of this material and collected less than
5 ounces of residue for each 3,000 pounds processed. Before processing through
the ECO2 system, the milk containers are ground into 1/2 inch flakes, as are all
the materials Itec processes and is dry before entering the ECO2 system. The
cost to dispose of this type of residue is only $50 per 55 gallon drum. Using
the same calculations used for the Pesticide containers (9,000,000 pounds
processed, although there is significant more of this type of material) the
number of gallons this material would generate 117 gallons of residue. Therefore
the average cost of disposal of the milk container residue would be $106.36 per
3,000 pounds. The cost would then be $0.0000118 per pound. Again we felt this
number results in zero and only as a cost of disposal and not an environmental
cost. The PET Soda bottles are very similar to the milk containers. The residue
is not considered hazardous. The amount of residue is almost exactly the same as
the Milk containers. The bottles are ground in the same manner and are dry after
granulation.

The detergent and other mixed color containers are also processed in the same
manner. The only difference is that these types of containers do contain a
greater amount of residue due to the nature of what is in the containers. This
residue does not go away or dry up during granulation. Our results from
processing several 3,000 pound controlled batches yielded 20 ounces of residue
per 3,000 pounds. This material is also not considered hazardous. Using the same
calculations as with all other types of materials this material would generate
468.75 gallons of residue. The cost per pound to dispose of this residue is $50
for each 55-gallon drum. The cost per pound is then $.000052.

Furthermore Itec believes that the disposal of waste is not an environmental
issue. It is part of everyday business costs.

As of December 31, 2002, we had arranged with Cool Clean Technologies, Inc. a
leader in the utilization of CO2 technology, to manufacture the ECO2TM
Environmental System. As of December 31, 2002, Cool Clean has manufactured four
ECO2TM Systems at its facility in Burnsville, Minnesota. The four prototype
systems are referred to as Generation One system. Additionally, Cool Clean has
manufactured a Generation Two system in Europe and Itec delivered the Gen 2 to
an Italian customer in January of 2003. We have relocated two of the Gen 1's
systems to Oakdale, California and expect to establish a recycling facility
where the Gen 1's can be both operated to generate income as well as demonstrate
the process for prospective purchasers.

                                       6
<PAGE>

Sources of Revenues

Our principal source of revenues will be sales of the ECO2TM Environmental
System. Prices for the ECO2 system range from $400,000 - $750,000 based on
various models and auxiliary equipment, with gross margins from $175,000 -
$300,000. We will also provide additional services to purchasers of the ECO2TM
Environmental System in exchange for recurring fees. These services will
include: extended warranty upgrades, technical support and trouble-shooting,
training for operators, consulting for material feedstock and products sales,
and software upgrades that will allow the ECO2TM Environmental System to clean
other contaminated plastic materials. The recurring or royalty fees would
average 9% of revenue for a period of five years. Based on the Italian business
models this would range from $28,000 - $35,000 per system per year. We will also
require purchasers of the ECO2TM Environmental System to enter into ten year
maintenance agreements providing for fees of $25,000 per year, payable in equal
monthly installments, for telephonic monitoring of the ECO2TM System and
software upgrades.

Deferred Revenue

Amounts billed in advance of the period in which a service is rendered or a
product is delivered are recorded as a liability under "Deferred Revenue". At
December 31, 2002, deferred revenue totaled $170,000 for the sale of ECO2
systems not yet shipped.

Recycling

With the advent of the global environmental movement, waste treatment and
remediation are now worldwide. Our goal is to clean and make recyclable certain
contaminated plastics that are currently not recycled. The ECO2TM Environmental
System has demonstrated an ability to produce clean, 100% recyclable
High-Density Polyethylene flake from used motor-oil containers and other HDPE
containers used to transport used oil and to recover the residual oil attached
to the plastic, with no waste by-products.

In addition to recycling used motor oil containers, laboratory tests have proven
four additional usages for our technology. They are:

o Pesticide Containers of HDPE (High-Density Polyethylene) o Mixed HDPE Color
Containers (Detergent, Shampoo and Clorox Containers) o Natural HDPE Containers
(Milk & Water Containers) o Polyethylene Terephthalate (PET) (Soft Drink
Containers)

Although originally developed for environmental usages, when applied to the
above materials the ECO2TM Systems has been shown to remove all contaminants,
odors, dirt and labels from the plastic, thereby producing clean marketable
flake which can be reused to produce end-products.

Technology

Some years ago, the American aerospace industry developed a supercritical fluid
technology to clean high-tech metals and composite materials. This method was
then adapted to become the ECO2TM Environmental System, which offers the ability
to effectively clean plastics.

                                       7
<PAGE>

The principal technology underlying the ECO2TM Environmental System was
developed by Honeywell International, Inc. and the U.S. Department of Energy. We
signed a five-year license agreement, with an additional five-year license
extension, with Honeywell and the DOE in June 2000. The base fee is $50,000 with
a minimum of $50,000 per year starting one year after the first commercial ECO2
system is sold. The annual fees are based on a 5% commission of the sale price
of any system sold in the United States and a 3% commission on any foreign
sales. There are no financial benchmarks or ratios that Itec must maintain to
remain in compliance with the Honeywell agreement.

Itec has received one of two licenses available from Honeywell to use the
technology developed using CO2 to "Separate and Recover Oil from Plastic
Contaminated with Oil". The Honeywell patent # 5,711,820 dated 27 Jan, 1998
Inventors Smith et al. assignee Allied Signal, Inc. transferred to Honeywell
Federal Manufacturing & Technologies. The patent is valid for twenty (20)years
from date of issuance.

Our technology has been recognized as a significant environmental breakthrough
and is expected to increase the percentage of plastic diverted from waste
streams to recycling and reuse. Honeywell FM&T and DOE received a Governor's
Award from the Missouri Chamber of Commerce in 2000 for their breakthrough
innovation in recycling technology.

We believe that our technology is unique and superior to alternative plastic
cleaning systems in several respects, including the percentage of purity
achieved and the elimination of secondary costs for wastewater cleanup
associated with other cleaning technologies.

In addition, compared to existing technology the ECO2TM Environmental System
provides the following advantages:

o Contaminated plastic cleaned with the ECO2TM Environmental System has a
significantly higher reusable end-use than conventionally cleaned plastic.
Plastic cleaned with the ECO2TM Environmental System is processed free from
odors and 99%+ contaminant-free. Conventional methods have a much lower
cleanliness threshold and do not deodorize. Once processed, these plastics have
a much lower end-use.

o Plastic flake cleaned with the ECO2TM Environmental System sells for
significantly higher prices than conventionally cleaned plastics. Odorless and
contaminant-free plastic flake yield higher prices and significantly larger
profit margins.

o Plastic recyclers have the ability to recycle oil-contaminated plastic and
conventionally contaminated plastic without wastewater effluent discharge. Costs
involving water-treatment are high using conventional cleaning methods, whereas
with our system they are non-existent. The ECO2TM Environmental System does not
use water.

o No permits are required for effluent wastewater discharge since the ECO2TM
Environmental System uses no water.

o Energy costs operating the ECO2TM Environmental System are significantly lower
than current plastic cleaning systems. Our ECO2TM Environmental System costs for
energy are nearly $0.02 USD less per pound than currently used processes,
yielding significantly larger profit margins.

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<PAGE>

o Direct processing costs for recycling plastics are reduced by over 50%. The
following costs for current water/chemical cleaning is based on a 3,000 pounds
of plastic per hour processing plant. The water/chemical plant used in this
calculation is Fixcor Industries based in Heath, OH. Electrical rates are based
on current Pacific Gas & Electric rates in Oakdale, CA.

                           WATER/CHEMICAL          CO2
                           --------------          ---
Electrical cost:              $23.85              $ 9.40  per hr. per 3,000 lb.
Chemicals/Solvents/CO2        $66.00              $28.00

o Both residual oil and plastic are recovered without creating waste by-products
which contaminate the environment.

o Odors associated with residual oil, pesticides and mixed HDPE plastic are
eliminated. Current cleaning technology does not remove contaminant odor from
recycled plastic.

o An economical solution is provided to pressing environmental protection and
pollution prevention problems associated with plastic motor oil container
recovery.

o A closed-loop system is formed which continually reuses low-cost CO2, has low
electricity costs and zero environmental impact.

o The ECO2TM Environmental System can be operated and maintained with only two
semi-skilled workers.

An Ideal Solvent

Carbon dioxide, also know as CO2, is produced by photosynthesis and constitutes
..04% of the air we breathe. CO2 is also a by-product of other industrial
processes, such as fermentation from distilleries. As a gas under atmospheric
conditions when liquefied represents an ideal solvent with characteristics that
cannot be matched by any other solvent, conventional or otherwise. It is
non-toxic, non-flammable, non-hazardous waste producing, non-ozone-depleting,
odorless, and cannot spill into the soil or groundwater since it becomes a gas
if it escapes from the ECO2TM System. Since the CO2 that is used in this process
is already in the air and is recaptured for reuse in the machines, no new CO2 is
produced or added to the atmosphere over the life of the cleaning cycle.
Commercially CO2 is used for, among many other things, carbonating beverages,
decaffeinating coffee beans and preserving foods.

From a performance standpoint, the ECO2TM Environmental System has distinct
advantages as well. Its viscosity (the ability to flow) and surface tension
(wetting capability) are orders of magnitude better than any other solvent, thus
enabling the penetration of contaminates and the removal of finer particles of
dirt or oil in 20 minutes or less, nearly as fast as conventional processes. The
greatest benefits to using the ECO2TM Environmental System are its ability to
thoroughly clean and deodorize plastic, thereby yielding significantly higher
retail prices for a clean flake.

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CO2 - Safe to Handle

CO2 does not show the toxic or flammable properties associated with traditional
plastic-cleaning solvents or methods. Risks connected with CO2 vary with the
different states of the compound. Gaseous CO2 may cause suffocation when found
in large concentrations in closed areas. Solid or liquid CO2 or cold CO2 gas
(dry ice), as well as cooled equipment may cause frost burns if unprotected skin
is exposed to the CO2 or the cooled equipment. The equipment used in our CO2
process is designed to handle and mitigate any such danger. It works as a closed
system where the used liquid CO2 is filtered, distilled, recycled and reused.

Environmental Regulations: Permissions And Safety Restrictions

The operation of a plastics-recycling business is subject to various regulations
which differ depending on the solvent used, the laws of the country as well as
local regulations. Carbon dioxide generally is subject to less regulation than
other solvents. There are no known or anticipated government regulations that
would prohibit or limited the sales or use of the ECO2 system sold by Itec.

There are no environmental costs associated with using the ECO2 system sold by
Itec.

Permissions required to install and operate CO2 plastics-cleaning equipment are
dependent upon both building department permits (local building authorities) and
CO2 storage permission (storing gas requires a permit in some countries). There
is no special approval necessary from any governmental agency in order to buy or
use the ECO2 system. Our manufacturer is responsible for seeing that the
machines and CO2 storage vessels are manufactured in accordance with national
and international safety standards.

Market Overview

Market Distinctions - Europe/Canada versus United States

Europe/Canada: Legislation is in place prohibiting oil-contaminated products
from placement into landfills. Available land for new landfills is extremely
limited. Government subsidized programs exist for the recycling of all plastics.
Developed in Canada, we are using the Alberta Used Oil Management Association
(AUOMA) collection model to develop the collection model for use in the United
States. The Alberta Used Oil Management Association (AUOMA) was formed at the
request of the Alberta Provincial Government (APG). The APG involved all the
sellers of petroleum products in the province to come up with a method to
collect, transport and process the three (3) by- products that are related to
Automotive Oil. They include the oil, filter and container the oil was shipped
in. For each Liter of oil sold in the Province the Oil Company that sells the
product must pay a fee into the "Not for Profit Organization" AUOMA. AUOMA was
chartered by the APG as a non-profit organization to manage the funds collected
by this program. These funds are distributed to the various companies that
collect, transport and process the oil, filters and containers.

United States: Legislation is in place prohibiting used-oil products in
landfills in many states, but may not be strictly enforced. Government
subsidized programs for recycling of all plastics are limited. New landfill
space is becoming limited in the smaller Northern States but remains available
in the larger states.

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Estimates indicate Europe and Canada are 15 years ahead of the United States
legislatively, environmentally and structurally relating to waste recycling and
collection efforts. As a result, we have chosen Europe for marketing and sales
of its initial systems. Europe has nearly run out of landfills and the
collective efforts to recycle all forms of waste, is prevalent in all European
nations. The entire continent is politically active in their legislative efforts
and recycling initiatives.

In contrast, the United States plastic recycling and oil recycling programs have
been modestly implemented and accepted in most areas for pollution prevention.
There are very few formalized collection programs for motor oil containers other
than in portions of South Carolina. The U.S. practice of dumping motor oil
containers into landfills or disposing of them improperly is no longer tolerated
in Europe. In order to facilitate its early marketing direction Itec determined
that it would need a representative to handle inquiries and further develop
markets in Europe. Itec secured the services of CESMET, a company with over 15
years experience in the Italian and European markets. CESMET, together with
other consultant companies, develops industrial projects involving plastic
recycling and collection for governments and the European Union. CESMET is an
engineering company stated in 1987 and owned by Mr. Andrea Videtta, Itec Vice
President and Director. CESMET works under ISO 9001 certification. The company
is listed in the "Official Consultant Book" for economic development activities
with both the Italian Ministries and European Union Ministries. CESMET billings
average $11,400 per month this covers all office expenses and personnel.
Services provided to Itec include reception, telephone, fax and mailing address.
Of greatest value to Itec are CESMET's consulting services regarding Italian
governmental policies and procedures. In addition to providing sales leads and
follow-up with customers and industry groups. The contract is renewed on an
annual basis from 1 July - 30 June.

Although this ECO2TM Environmental System was originally developed for
environmental usages, when applied to the above areas, the ECO2TM Environmental
System has been shown to remove all contaminants, odors, dirt and labels from
the plastic producing clean marketable flake which can be reused to produce
end-products. With this increase in usage, the worldwide market for ECO2TM
Environmental System increases geometrically. Ultimately, the ECO2TM
Environmental System could become a primary recycling system.

Marketing and Sales

The basis for Itec's sales strategy is to focus on the industries and countries
most likely to benefit from Itec's technology. Potential customers are basically
divided into two distinct segments - private enterprise plastic recyclers and
government sponsored plastic recyclers.

During 2002 Itec was in discussion with the business manager for Exxon/Mobil in
Hungry. Due to the regulations in the Eastern Block countries they are required
to recycle or incinerate the Oil Containers. During his time in Budapest,
Hungary we worked out a collection and processing scenario. It resulted in the
order from the Hungarian Company. The Hungarian company has the "right of first
refusal" to become the operator in the following countries, Hungary, Poland,
Czech Republic, Slovakia, Slovenia, Macedonia and Serbia. As of today the
company is waiting for the startup of the first system in Italy so they can
bring the government officials from Hungary to Italy to demonstrate the
technology for them. The business manager has transferred to his company's
office in St. Petersburg Russia. He has been working to have Itec visit with
countries that he is working in, within the framework of his job as a business
manager for Exxon/Mobil.

                                       11
<PAGE>

Itec has been in discussion with Polis LTD in Varna, Bulgaria for 2 years. They
would like to represent Itec and have the "right of first refusal" to be the
operator in the following countries: Ukraine, Moldavia (we have received an
independent inquiry from Moldavia), Bosnia, Yugoslavia, Turkey, Romania
Tajikistan, Uzbekistan. As of today Polis is waiting for the startup of the
first system in Italy so they can bring the government officials from the
various countries to Italy to demonstrate the technology to them.

Politenke is an Italian company that does business in both Italy and Germany.
The principal of the company is in partnership with the principal of OPT Srl.,
our first customer in Italy. As with the other companies and countries they are
waiting to see the demonstration of the system.

In Finland and Sweden we have been in discussions with Mr. Perti Jalasvirta
(brother of Yrjo) to represent Itec in those countries.

Mr. Hofmann has recently met with two representatives of a Waste Hauler from
Greece, in Italy. They were taken to the OPT facility in Italy to see the
progress on the system. We are in continuing discussions with them.

Itec recently went through an audit with Chevron/Texaco from their Richmond,
California plant. The purpose was to certify our test plant in Oakdale to
receive the scrap plastic from the oil containers that are generated from the
bottle filling plant in Richmond.
Itec passed their audit and is now accepting the materials from the Chevron
plant.

Mr. Videtta, our VP in Italy, also has a CESMET office in St. Petersburg Russia.
He has been in contact with the environmental Ministries, as well as with the
one in Italy. In Bulgaria, Polis LTD along with Mr. Videtta has been contacted.
In Hungary Mr. Videtta and EnviroPlastic has contacted the Ministry. Again in
all cases the companies, agencies and Ministries are waiting for the
demonstrations.

To date the following companies and governments have expressed interest in our
technology. Those companies include: Exxon/Mobil (for system installations in:
Russia, Finland, Tajikistan, Uzbekistan, Ukraine, Yugoslavia, Macedonia,
Moldavia, Serbia, Bosnia, Greece, Poland, Turkey and Hungary), Shell Oil, AMEX,
Ravisz from Hungary and Polis LTD. from Bulgaria, CSAV from Hungary and
Politenke (Italy and Germany). Those countries whose environmental ministries
have expressed interest are: Italy, Bulgaria, Hungary and Russia.

Purchase Order Contracts of Sale have been signed for ten ECO2TM Environmental
Systems in Italy and one in Hungary.

Licensing and Patents

Itec's technology is under license from Honeywell International Inc., and the
U.S. Department of Energy. Honeywell has the right to grant a license to utilize
the technology to one other entity, but has not done so. Currently, there are no
other licensees of this technology.

Itec has received from the United States Patent and Trademark Office the
Trademark name "ECO2" Reg No. 2,693,834.

                                       12
<PAGE>

Manufacturing

Itec uses Cool Clean Technologies, Inc to manufacture ECO2TM Systems. Cool Clean
has arranged for manufacturing to take place at the facilities of Chart
Industries, Inc in Burnsville, Minnesota, for ECO2TM Systems to be delivered in
the United States, and the Czech Republic for ECO2TM Systems to be delivered in
Europe.

Research and Development

Research and Development costs for year 2001 were $60,000; 2002 were $12,740;
and estimates for 2003 are $185,000.

Competition

There are no competitors in the field of plastic cleaning process using CO2 as
the cleaning agent. Honeywell has the right to issue only two license agreements
for their technology and to date only one has been issued, and that is to Itec.
The ECO2 cleaning system as compared to conventional methods has a more than 40%
cost advantage in direct costs, a much lower overhead component due to reduced
size and total capital costs are lower as well.

Employees

As of January 15, 2004, we employed seven persons, five of which were full time,
including our President and Chief Financial Officer.

COMPANY WEBSITE

The current website for the Company is located at www.iteceg.com.


                                  RISK FACTORS

In addition to the other information in this Report on Form 10-KSB/A the
following risk factors should be considered carefully in evaluating the Company
and its business. If any of the following risks actually occur, our business,
operating results and financial condition could be harmed and the value of our
stock could go down. This means you could lose all or a part of your investment.

RISKS RELATED TO OUR BUSINESS:

WE HAVE HAD LOSSES SINCE OUR INCEPTION. WE EXPECT LOSSES TO CONTINUE IN THE
FUTURE AND THERE IS A RISK WE MAY NEVER BECOME PROFITABLE.

We have incurred losses and experienced negative operating cash flow since we
acquired our operating business. For our fiscal years ended December 31, 2002
and 2001, we had a net loss of ($2,563,732) and ($2,416,875), respectively. We
expect to continue to incur significant operating expenses as we maintain our
current line of systems and continue research and development toward new advance
systems. Our operating expenses have been and are expected to continue to
outpace revenues and result in significant losses in the near term. We may never
be able to reduce these losses, which will require us to seek additional debt or
equity financing. If such financing is available, of which there can be no
assurance, you may experience significant additional dilution.

                                       13
<PAGE>

OUR INDEPENDENT AUDITORS HAVE EXPRESSED DOUBT ABOUT OUR ABILITY TO CONTINUE AS A
GOING CONCERN, WHICH MAY HINDER OUR ABILITY TO OBTAIN FUTURE FINANCING.

Henry Schiffer, CPA, An Accountancy Corporation, in his independent auditor's
report dated December 31, 2002 has expressed "substantial doubt" as to our
ability to continue as a going concern based on significant operating losses
that we incurred. Our consolidated financial statements do not include any
adjustments that might result from the outcome of that uncertainty. The going
concern qualification is also described in note 2 of the notes to the
consolidated financial statements. As a result of the going concern
qualification, we may find it much more difficult to obtain financing in the
future, if required. Further, any financing we do obtain may be on less
favorable terms.

WE OPERATE OUR BUSINESS IN ONE GEOGRAPHIC LOCATION AND THIS CONCENTRATION OF
OPERATIONS RESULTS IN AN ASSOCIATED RISK TO OUR OPERATIONS AND SALES.

We operate our business principally in Italy. The potential for severe financial
impact can result from negative effects of economic conditions within the
markets or geographic areas. Since our business is principally in one area, this
concentration of operations results in an associated risk and uncertainty to our
operations and sales.

WE HAVE A FEW PROPRIETARY RIGHTS, THE LACK OF WHICH MAY MAKE IT EASIER FOR OUR
COMPETITORS TO COMPETE AGAINST US.

We have licensed our technology from Honeywell, Inc. This license expires in
2005 and may be terminated by Honeywell upon default by us after 60 days written
notice. Although we are current with the payments required under this agreement,
Honeywell is free to license the technology to one other person or entity
without any restrictions on its use. Such person or entity may develop systems
or technologies which compete directly with our systems which may place us at a
competitive disadvantage.

OUR FAILURE TO SELL, MARKET AND DISTRIBUTE OUR SYSTEMS COULD CAUSE US TO LOSE
REVENUE AND HARM OUR COMPETITIVE POSITION.

We have limited sales, marketing and distribution expertise and capabilities.
Establishing and maintaining sales, marketing and distribution expertise and
capabilities may require significant expenses including additions to personnel.
There can be no assurance that we will have sufficient capital resources
necessary to expand our sales, marketing and distribution expertise and
capabilities, and that even if such resources are available, that we will be
successful in doing so. We have targeted a significant portion of its marketing
efforts outside the United States, primarily in Europe. If we are unable to
establish and maintain significant sales, marketing and distribution efforts
either internally or through arrangements with third parties, we could lose
revenue and our business, financial condition and results of operations may be
materially adversely affected.

OUR SUCCESS IS DEPENDENT UPON COOL CLEAN TO MANUFACTURE OUR SYSTEM AND THE LOSS
OF THIS MANUFACTURER COULD SLOW OR STOP PRODUCTION OF OUR SYSTEM AND IMPAIR OUR
ABILITY TO GENERATE REVENUES.

Through the end of our fiscal year ended December 31, 2002, we relied upon
arrangements with Cool Clean to manufacture our system. As of December 31, 2002,


                                       14
<PAGE>

four prototype (Gen-1) and one Generation 2 systems had been produced by Cool
Clean. We are now reliant upon Cool Clean, a private company managed by current
and former executives of Chart, to produce our systems. We do not have any
written agreement with Cool Clean. Our success is dependent upon Cool Clean to
manufacture our system and the loss of this manufacturer could slow or stop
production of our system and impair our ability to generate revenues.

WE NEED TO RAISE ADDITIONAL FUNDS FOR OUR OPERATIONS AND IF WE ARE UNABLE TO
SECURE SUCH FINANCING, WE MAY NOT BE ABLE TO SUPPORT OUR OPERATIONS.

We have not established a limit as to the amount of debt we may incur nor have
we adopted a ratio of our equity to a debt allowance. If we need to obtain
additional financing, there is no assurance that financing will be available
from any source, that it will be available on terms acceptable to us, or that
any future offering of securities will be successful. If additional funds are
raised through the issuance of equity securities, there may be a significant
dilution in the value of our outstanding common stock. Our business, financial
condition and results of operations could suffer adverse consequences if we are
unable to obtain additional capital when needed.

RISKS RELATING TO OUR COMMON STOCK:

OUR COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND THE
TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR
STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

The Securities and Exchange Commission (the "Commission") has adopted Rule 15g-9
which establishes the definition of a "penny stock," for the purposes relevant
to us, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience objectives of the person; and
(ii) make a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the Commission relating to
the penny stock market, which, in highlight form, (i) sets forth the basis on
which the broker or dealer made the suitability determination; and (ii) that the
broker or dealer received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks of investing in
penny stocks in both public offerings and in secondary trading and about the
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny stocks.


                                       15
<PAGE>

OUR SECURITIES ARE THINLY TRADED AND THE LIMITED LIQUIDITY IN OUR SECURITIES
COULD RESULT IN A DECREASE IN THE PRICE OF OUR SHARES.

The trading market price of our common stock may decline below its current
price. Our common stock is currently very thinly traded on
Over-The-Counter-Bulletin Board. The following is a chart of our average daily
and weekly trading volume:

                               Jan 1, 2002 to Dec 31, 2002
                               -----------------------------
Average Weekly Volume:                   164,180
Average Daily Volume:                     32,836

An active public market for our common stock may not develop or be sustained
during or after this offering. The additional shares made available for sale in
the market as a result of this offering may depress the price of our common
stock.

POTENTIAL ADVERSE EFFEDT OF ISSUANCE OF PREFERRED STOCK

The Company's Certificate of Incorporation allows the issuance of up to
10,000,000 shares of preferred stock without further shareholder approval and
upon such terms and conditions and with such rights, preferences, privileges and
restrictions as the Board of Directors may determine. The rights of the holders
of common stock will be subject to and may be adversely affected by the rights
of holders of any preferred stock that may be issued in the future.

September 11, 2001 Terrorist Attack

As a result of the terrorist attacks in New York, Washington and Pennsylvania on
September 11, 2001, significant financial and political changes have taken place
in the United States and in the world. These changes will have an effect upon
the Company and the future activities contemplated by this Report. Many of the
Company's plans were made prior to September 11th and without regard to the
events which took place on that date. As a result, future developments
concerning the Company and its ability to act in accordance with the plans and
expectations set forth in this Report are subject to significant uncertainty.


ITEM 2.  DESCRIPTION OF PROPERTY

The Company leases its offices from a non-affiliated party under an agreement
expiring in April 2004 at a rental of $900 per month.


ITEM 3.  LEGAL PROCEEDINGS

In early 2003 the Company filed a lawsuit against Fedegari Autoklavi A.G. for
fraud, breach of contract and unfair business practices. This legal proceeding
was filed in California Superior Court for Stanislaus County.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended December 31, 2002.

                                       16
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         (a) MARKET INFORMATION. The Company's common stock is currently traded
in the over-the-counter market, and prices for the common stock are quoted on
the OTC Electronic Bulletin Board ("OTCBB") under the symbol ITCV. There is no
assurance that the OTCBB can or will provide sufficient liquidity for the
purchase and sale of the Company's common stock.

The following table sets forth the high and low closing bid prices of the
Company's common stock for the period indicated, as obtained from the NASD. The
stock is principally owned or controlled by Officers and Directors of the
Company, and the bid prices reported may not be indicative of the value of the
common stock. The volume of trading in the Company's common stock has been
minimal. These over-the-counter market quotations reflect inter-dealer prices
without retail markup, markdown or commissions and may not necessarily represent
actual transactions.

             QUARTER ENDED                     HIGH BID       LOW BID
             -------------                     --------       -------
             December 31, 2002                  $ .28          $ .02
             September 30, 2002                 $ .48          $ .05
             June 30, 2002                      $ .61          $ .24
             March 31, 2002                     $1.01          $ .60

             December 31, 2001                  $ .60          $ .16
             September 30, 2001                 $1.39          $ .28
             June 30, 2001                      $2.05          $ .16
             March 31, 2001                     $1.25          $ .19

         (b) APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK. The number of record
holders of the Company's common stock at December 31, 2002, was approximately
1,400. This includes shareholders who hold stock in their accounts at
broker/dealers or at clearing houses.

         (c) DIVIDENDS. No dividends have been declared or paid by the Company
since inception.

         (d) RECENT SALES OF UNREGISTERED SECURITIES. Pursuant to a Regulation S
Stock Purchase Agreement dated, December 20, 2001 (the "Agreement"), between the
Company and Starz Investments Limited, a Belize international business company
("Starz"), the Company agreed to sell and Starz agreed to use its best efforts
to purchase up to 5,000,000 shares of the Company's common stock, at a purchase
price equal to 35% of the bid price of the Company's shares as quoted on the OTC
Bulletin Board for the five consecutive trading days immediately preceding the
date of a purchase order received by the Company. As of December 31, 2002 an
aggregate of 5,016,508 shares had been purchased under the Agreement by foreign
designees of Starz and the Company had received net proceeds of $1,194,000 or
$.24 per share. Pursuant to a similar Regulation S Stock Purchase Agreement
dated, July 26, 2002 the ("Second Agreement") between the Company and Starz. The
Company agreed to sell and Starz agreed to use its best efforts to purchase up
to 7,500,000 shares of the Company's common stock, at a purchase price equal to
35% of the bid price of the Company's shares as quoted on the OTC Bulletin Board


                                       17
<PAGE>

for the five consecutive trading days immediately preceding the date of a
purchase order received by the Company. As of December 31, 2002 an aggregate of
7,033,242 shares had been purchased under the Second Agreement by foreign
designees of Starz and the Company had received net proceeds of $327,000 or $.05
per share. Under the terms of these Agreements, Starz has the right to require
the Company to include the shares in any registration statement under the Act
filed by the Company after a period of one year from the date of purchase of
such shares. All costs in connection with such registration are to be paid by
the Company. The Company claims the exemption from registration of these
transactions afforded by Regulation S under the Act in that all sales of the
shares were made in "off-shore transactions" to persons who are not U.S.
persons. No "directed selling efforts" were engaged in by either the Company or
Starz and Starz made other representations and entered into other agreements
consistent with the provisions of Regulation S.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

Itec Environmental Group, Inc. (the "Company")(f/k/a Beechport Capital Corp.)
was organized as a Colorado corporation on January 24, 1989. On May 29, 2001,
the Company filed a current report on Form 8-K to report that effective May 4,
2001, the Company entered into a share exchange agreement with Itec, to acquire
all the issued and outstanding shares of common stock of Itec in exchange for
6,651,987 shares of the Company's common stock. This business combination
resulted in the shareholders of Itec owning approximately 66.5% of the issued
and outstanding shares of the Company's common stock (10,000,000 shares were
outstanding upon completion of the transaction), and the Company holding 100% of
the issued and outstanding shares of Itec's common stock. In September of 2002
the Company filed a notice on Schedule 14A changing it's name to Itec
Environmental Group, Inc. and moving the domicile to the State of Delaware.

Itec uses patented technology and proprietary equipment to design and sell
worldwide oil and agricultural chemical container recycling equipment and
related systems. Itec's initial marketing of the technology is concentrated in
California and Italy.

Itec licenses environmental technology using a carbon dioxide cleaning process
from Honeywell International, Inc. This new environmental technology, the
System, is believed by management to be the only pollution reduction and
recycling system on the market today that allows for the 100% recycling of
plastic motor oil containers and the residual oil left inside each container. By
using the carbon dioxide cleaning process, the Company can focus on
environmental protection and environmental safety by creating no chemical waste
disposal in the oil recycling and plastic recycling process.

As of December 31, 2002 Itec had revenue of $24,000, a stockholders deficit of
$2,561,148, an accumulated deficit of $6,394,555 and a working capital deficit
of $795,847.

Itec recognized its first revenue in the last quarter of 2002 form the sale of
granulators. The granulators sold by Itec are part of the collection process
organized under the State of California's Integrated Waste Management Board
effort to reduce the number and amount of used oil containers being sent to land
fills.

                                       18
<PAGE>

Expenses for the year are grouped in six primary areas: Professional Fees &
Consulting $1,134,000; Payroll $498,000; Sales & Marketing $198,000; Interest
$175,000; R & D $150,000; G&A $355,000.

We do not have sufficient cash or lines of credit for the next twelve months but
are in the process of raising funds. We expect to have sufficient cash or lines
of credit to satisfy our needs for the twelve months ending December 31, 2003.
There is no guaranty, however, that efforts will result in Itec raising
sufficient capital or any capital or additional financing.

Our plans for the next twelve months are two-fold. The first is to continue
marketing and selling the ECO2TM Environmental System on a world wide basis. The
second is opening a plastic recycling plant in Stanislaus County, California.

Orders for ten Gen-2 ECO2TM Environmental Systems to be delivered in Italy were
signed in 2002 and delivery was to start in the first quarter of 2003. The first
Gen-2 ECO2 system for Italy was delivered in January 2003 and is in final
testing phase with expectations of being fully operational. Upon conformation of
this first system's operational status the equipment for the remaining systems
will be delivered and assembled in Italy for delivery to customers. Over the
next twelve months Itec's plans for Italy are to have delivered an additional
three mobile Gen-2 ECO2 systems. The timetable for this second phase is the
second quarter 2003 for these remaining three units. The remaining six orders
will be delivered in 2004.

Financing for the current ECO2TM Environmental Systems customers in Italy will
be secured through IG-Sviluppo Italia s.p.a., the Treasury Agency of Italy. The
loan guarantee is provided through the Treasury Agency of Italy to the "startup"
Italian Company and not paid or assignable to Itec. Future Itec customers may
apply for this government loan program and will be evaluated on the business
plan and financials that they submit to the Italian Agency at that time. Itec's
first "Italian startup" customer is OPT International, srl. of Paliano, Italy.




                                       19
<PAGE>

The following chart names our customers, describes the status of the ordered
products, and describes the estimated time of delivery:

<TABLE>
<CAPTION>

                CUSTOMERS FROM THE IG       Status of Project   Estimated Date      Estimated       Deposit
                                                 with IG        of Completion       Delivery         Paid
                                                                 IG Process         of System
<S>                                         <C>                 <C>                 <C>              <C>
OPT International / Massimo Mari                Approved
     Loc. Paduni snc.
     03012 Anagni (FR) Italy
    System 1                                                                         Delivered       $ 40,000
    System 2                                                                         7 Months

V2&M Plastic srl / Pasquale Vella            95% Complete         4 Months
    Via Vivaldi n. 59
    81100 Caserta Italy
    System 1                                                                        10 Months       $ 40,000
    System 2                                                                        16 Months       $ 40,000

E-bios sas / Alberto Mazza                    90% Complete         8 Months
Via Nocelle, 69
80128 Napoli Italy
    System 1                                                                        14 Months
    System 2                                                                        20 Months

Ecotruck srl / Giuseppe Cuscuna               80% Complete         9 Months
     Ecotruck srl Via Cisterna, 3
     89844 Nicotera (V) Italy
    System 1                                                                        15 Months
    System 2                                                                        21 Months

CM Cleaning srl / Carlo Mastrominico          50% Complete         12 Months
     Via Aldo Moro, 31
     San Cipriano D' Avers
     System 1                                                                       18 Months       $ 40,000
     System 2                                                                       24 Months       $ 40,000
                 NON IG CUSTOMER

EnviroPlastic-Hungary                        Waiting for
    Istvan Kiraig UT 32                      Demonstration
    529 Zhalombatta H2440 Hungary            in Italy
    System 1                                                                         9 Months       $ 75,000


                                                                                                    $275,000
</TABLE>

There are pending orders for six mobile/portable ECO2TM Environmental Systems
for delivery during calendar year 2004.


                                       20
<PAGE>

In Italy Itec will be selling the ECO2 system and provide training to the
operators of the system. Itec is providing additional services to the buyers of
the ECO2 system that include selling their recycled plastic to H. Muehlstein via
Itec's supply agreement. Itec also provides a maintenance and equipment upgrade
program to the buyers of the ECO2 system.

Itec has entered into negotiations with certain note holders who are due a total
of $815,231. The $815,231 dollars are notes payable to 19 Italian investors
ranging from $5,422 to $122,773. Most are also business owners or partners in
companies that have signed purchase orders for equipment being sold by Itec.
During 2003, $98,578 of the notes payable have reclassified from debt to revenue
and $270,190 reclassified from notes payable to deferred revenue. An additional
$200,917 may be reclassified from deferred revenue to revenue in early 2004. The
balance of $245,546 may be reclassified to revenue during 2005. However, no
assurances can be given in this regard, to future activity.

The note holders are also customers of Itec to purchase ECO2 systems who have
signed purchase orders. Knowing that the research and development schedule could
last many months or years, Itec suggested that they instead receive a note
receivable from Itec at a rate of 5% per annum until Itec was prepared to
deliver their order for an ECO2 system. So instead of simply placing their
deposits for systems in a deferred revenue account, Itec is showing this as a
note payable. During 2003, Itec started its delivery process, these various
notes are being converted to deferred revenue as the customers system moves
through the assembly process. Then upon deliver and acceptance of the ECO2
system in Italy, Itec will then transfer the deferred revenue asset and
recognize the revenue from the sale.

Concurrently in the United States, Itec plans to both sell the ECO2
Environmental System and in California operate a full scale recycling plant. We
have signed a two year lease on a 6,900 sq ft building and have purchased or
leased all equipment necessary for the plastic recycling test plant in
California. The recycling pilot plant opened for operations in June 2003 and is
located in Oakdale, CA. with two full time employees being hired for this
operation.

We currently have contacts in place for all needed raw product and we are
seeking additional sources of product for future growth. Green Flame Services
has provided a "letter of intent" to supply "Oil Contaminated Plastic" to Itec
in addition to our own collection program. The Green Flame agreement is for a
period of one (1) year.

Itec has sold and continues to market 3 different sizes of Granulators to
Cities, Counties and private businesses throughout California. As part of our
sales of granulators, Itec collects $125 per drum of ground oil containers from
these locations. Green Flame Services will service each of these accounts and
Itec will pay $75 ($25 freight and $50 customer service) for each drum delivered
to Itec by Green Flame Services from these locations that have purchased
Granulators from Itec, resulting in a net to Itec of $50 per drum.

Green Flame Services has built 2 mobile granulating systems and is signing up
accounts that Green Flame Services will service. This is when the volume of
contaminated oil containers are not sufficient to warrant these customers
(cities, counties or private industry) to purchase granulators from Itec. In
this program Green Flame Services is collecting the fee from the City or County
from their State of California "Opportunity" or "Block" Grants distributed to
them by the California Intergraded Waste Management Board ("CIWMB").

                                       21
<PAGE>

Funds for these types of grants come from the Oil Recycling Fund that is
administered by CIWMB. The only "material termination" clauses are in the event
the product is contaminated with foreign matter or water.

We have a "letter of intent" from H. Muehlstein, Inc. to sell all High Density
Poly Ethylene Frac Melt Reproproduced and processed once production starts. The
non-industry term for this type of plastic is plastic pellet. This agreement is
for a period of one (1) year and is priced at the market price. There are no
"Material Termination" clauses.

Itec is in negotiations to lease a larger building to install a full production
recycling operation in Stanislaus County, California. It is a five year lease
with a five year option. It has a sliding scale rent structure starting at
$3,000 per month and reaching $18,730 in month 9, with CPI increases on an
annual basis. This lease would be for a 55,000 sq ft steel frame building in a
heavy industrial complex, it would include approximately 3,500 sq ft of office
space. All infrastructure including rail sidings are in place. Plans are to have
this larger building leased by 31 January. Installation of equipment will take
three months with the first testing of systems in April 2004. After completion
of testing of the systems, the start-up operational phase with take an
additional two months. Employment would ramp up with the new recycling plant
starting with four new employees, then adding an additional 18 employees. Itec
will utilitize both buildings, continuing to use current location as our
corporate offices and as a testing and research facility.

The following chart provides details of our milestones in our business plan and
timeline for reaching these milestones.

                                     Months to
Task required                         Complete   In Month     Cost     Completed
-------------                        ---------   --------    --------  ---------
Receive Approval of Funding
Negotiate lease                           1           4                    Yes
     Deposit required                                        $ 55,000
Permit Process                                        0                    Yes
     One Permit Necessary -
       Air Quality                                                         Yes
Engineering                               2           5      $ 50,000      25%
Electrical Installation                   1           7      $ 25,000      No
Order Equipment & Pay 20% Deposit                     7      $ 83,688      No
       Equipment Progress Payments
Equipment Cost Progress Payment                       8      $167,377      No
Balance of Equipment Payment                          9      $167,377      No
Installation of Equipment                 2          10      $ 75,000      No
COD Purchases                                        10      $ 12,500      No
--------------------------------------------------------------------------------
Total Cost                                                   $635,942
Start Production                                     10

We do not have sufficient cash or lines of credit to fund operations for the
next 12 months. Itec is in negotiations to secure a bank line of credit via a
commercial bank at this time and that will fund the balance of the year.


                                       22
<PAGE>

Cash needs for the next twelve months are as follows: Sales and marketing
$445,000 this is to fund both the European office and our US activities,
brochures and trade show meetings, advertising and promotions. Research and
development $380,000 is comprised of continuing research and testing in the use
of bio-solvents and their effect on the cleaning process, testing of all samples
of plastic for residue after the CO2 process, developing additional suppliers
and manufactures of the ECO2 system and related equipment. Capital projects
$700,000 to start up the full scale recycling/processing plant in California.
General working capital needs are $780,000 for general office expenses, payroll
and benefits, legal and audit, increased inventory and business development
projects.

Strategic Alliance Agreements

Itec has engaged in a series of discussions for the purpose of entering into
manufacturing, technology and sales alliances. Such discussions are ongoing and
the Company anticipates that these negotiations will lead to the consummation of
several critical contracts, agreements and/or alliances in the foreseeable
future that will provide the Company with the ability to accelerate the
sales/delivery cycle through calendar year 2003 and thereafter.

The Company entered into a manufacturing/licensing agreement in third quarter
2001 with a U.S. based equipment manufacturer capable of producing the System on
time and on budget. This manufacturer also has a facility in the Czech Republic
capable of producing all European Systems. This will allow the Company to assure
that all Systems will be of the same specifications, standards and quality,
resulting in reduced costs per System with the highest quality. The arrangement
with an Italian manufacturer was cancelled in fourth quarter 2001.

The Company has engaged consultants to assist in raising additional equity for
debt reduction and working capital needs. During the second and third quarter
2003 the Company expects to issue an additional 10,000,000 shares of common
stock in conjunction with its efforts to raise capital.

Significant Accounting Policies and Estimates

Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses the Company's consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. On an on-going
basis, management evaluates its estimates and judgments, including those related
to reserves and intangible assets. Management bases its estimates and judgments
on historical experiences and on various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. The most significant
accounting estimates inherent in the preparation of the Company's financial
statements include estimates as to the appropriate carrying value of certain
assets and liabilities which are not readily apparent from other sources,
primarily allowance for doubtful accounts recovery of intangible assets. These
accounting policies are described at relevant sections in this discussion and
analysis and in the notes to the consolidated financial statements included in
our Annual Report on Form l0-KSB for the fiscal year ended December 31, 2002.

                                       23
<PAGE>

Forward looking statements

This report contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. Stockholders are cautioned that all
forward-looking statements involve risks and uncertainty, including without
limitation, our ability to expand our customer base, make strategic
acquisitions, general market conditions, and competition and pricing. Although
we believe the assumptions underlying the forward-looking statements contained
herein are reasonable, any of the assumptions could be inaccurate, and
therefore, there can be no assurance that the forward-looking statements
contained in the report will prove to be accurate.

ITEM 7.  FINANCIAL STATEMENTS

The financial statements are set forth on pages F-1 through F-15 hereto.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING OR
         FINANCIAL DISCLOSURE

There have been no disagreements between the Company and its independent
accountants on any matter of accounting principles or practices or financial
statement disclosure since the Company's inception.

As of February 5, 2002 Schumacher & Associates, Inc. Certified Public
Accountants, ("Schumacher") ceased to be the independent auditors for the
Company. Such firm's reports on the financial statements of the Company for the
past two years did not contain an adverse opinion or a disclaimer of opinion nor
were such reports qualified or modified as to uncertainty, audit scope or
accounting principals. The decision to change accountants was recommended by the
Board of Directors of the Company and was made solely because of the Board's
decision to relocate the principal operations of the Company to California.

During the Company's two most recent fiscal years and through the date of
termination there were no disagreements with Schumacher on any matter of
accounting principals or practices, financial statement disclosure or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
Schumacher would have caused Schumacher to make reference to the subject matter
of such disagreements in connection with its reports.

During the Company's two most recent fiscal years and subsequent thereto the
Company was not advised by Schumacher of any matters required to be disclosed
under this item.

On February 5, 2002 the Company engaged Henry Schiffer, C.P.A., Accounting
Corporation ("Schiffer") to audit the financial statements of the Company for
the year ended December 31, 2001 and 2002. At no time prior thereto had the
Company consulted Schiffer regarding any accounting matters.


                                       24
<PAGE>

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

         (a) The Directors and Executive Officers of the Company as of December
31,2002 were as follows:

              NAME                    AGE            POSITION
              ----                    ---            --------
       Gary M. De Laurentiis          58             President and Director

       Andrea G. Videtta              45             Vice President Foreign
                                                     Operations and Director

       Lisa Ann Marie Fitzpatrick     37             Vice President Sales and
                                                      Director

       John R. Murray                 65             Director

       Michael E. Hofmann             52             Chief Financial Officer

Gary M. De Laurentiis, Chairman and CEO - Mr. DeLaurentiis has substantial
business management and operating experience in the plastics recycling industry.
He previously served as President of Fixcor Industries International and its
wholly-owned subsidiary, Pallet Technology, from 1997 - 1999. In this role he
supervised the construction of and managed operations of plastic recycling and
pallet manufacturing operations in Ohio and Florida. Fixcor Industries is a
plastic recycling company. It purchased post consumer plastic on the open market
from plastic brokers, cleaned the plastic, palletized the plastic flake and sold
the pellets to manufactures. Mr. De Laurentiis' background includes the founding
and executive management of manufacturing companies engaged in electronics,
recycling and plastics molding. The following is a list of positions he has held
since 1974:

1974 to 1980 President, Pure Research, Inc.       Electronics Mfg. Co.
1980 to 1984 President, SECOM Corp.               R & D Electronics Mfg.
1986 to 1988 Vice President, Plastics II          Injection Molding Co.
1987 to 1992 President, RPX Resins, Inc.          Plastic Recycling
1993 to 1995 President, ANEW Corp.                Plastic Recycling
1997 to 1999 President, Fixcor Industries Inc.    Plastic Recycling
1998 to 1999 President, Pallet Technology         Manufacturing Company
1998 to 1999 President, Fixcor Recovery Systems   R & D Recycling

 He has supervised the construction of two recycling plants in China and one
plant in Mexico, all funded through government grants. Mr. De Laurentiis worked
in China from 1987 thru 1992. He was the President of RPX Resins. As president
of RPX he was responsible for all aspects of operations of RPX. RPX was
originally formed to be a plastic broker sending export containers filled with
post consumer plastic from the United States to China. In 1988 RPX formed a
joint-venture with the local Chinese government in the Dongaun Region of the
"Free Trade" zone in southern China. Mr. De Laurentiis worked in Mexico from
1993 to 1995. He was President of ANEW Corp. As president he was responsible for
all aspects of operations of ANEW. ANEW was formed to research building a


                                       25
<PAGE>

plastic recycling plant in Mexico. After 6 months and having permits granted in
Encinada, Mexico, 60% of the company was sold to a group that included of the
Government of the State of Compeche, Mexico. Beginning in late 1999 Mr.
DeLaurentiis began the early development of the CO2 technology that would evolve
into the firm Itec in March 2000.

Andrea G. Videtta, Vice President and Director - Mr. Andrea Videtta joined Itec
20 March, 2000 Mr. Videtta is currently the Director of the Center for Economic
and Territorial Modification ("CESMET") in Naples, Italy. CESMET is a private
company working with government and industry in city planning, economic
development and environmental protection. Mr. Videtta has been with CESMET since
1988. Over the past 10 years, he has completed many management and research
assignments focused on the regional development of Southern Italy. Mr. Videtta
has also published books and articles on regional economic development. A native
of Naples he holds a Degree in Architecture from the University of Naples and is
fluent in Italian, Russian and English.

Lisa Ann Marie Fitzpatrick, Vice President and Director - Ms. Fitzpatrick is the
former project manager for Fixcor Recovery Systems from1998 through 1999 where
she managed the program of seeking and administering government grants. Fixcor
Recovery Systems was the company that was working with the early development of
CO2 Technology. In addition she has served as the Administrative Manager of
Pallet Technology from 1998 - 1999,where she supervised customer service,
order-entry and inventory control. Ms. Fitzpatrick joined Itec in March 2000.
Ms. Fitzpatrick is the daughter of Mr. De Laurentiis.

John R. Murray, Director - Mr. Murray has over 40 years of experience in the
Business and Operations Management of the Engineering, Manufacturing,
Construction and Data Processing industries. In addition, as a Consultant, he
has been associated with Mr. DeLaurentiis in the Planning and Development of
Plastic Recycling and Plastic Manufacturing facilities in the USA and Africa. He
has also served in a consultant capacity to the President of a large volume Foam
Plastic manufacturer, World Plastics of Red Bank, NJ for a period of ten years
from 1989-99 . . Prior to World Plastics he served as Assistant to the President
of Temecon, Inc. of Bridgewater, NJ from 1980-89. He has an extensive background
in the development and funding of both domestic and foreign operations that
require Federal and Foreign government participation. He functions as a Special
Assistant to Mr. DeLaurentiis for the development of Eastern operations for the
company, as well as for the African continent.


Michael E. Hofmann, CFO, Director- Mr. Hofmann joined ITec in January of 2002 as
CFO. He was formerly the CFO of eBioCare.com from Sept 1999 - May 2001 , a
Silicon Valley startup that provided management and services for various chronic
conditions using a Web based platform for back office, order entry and
accounting services. eBioCare.com was a online retail pharmacy of products for
chronic conditions (i.e. hemophilia, M.S., asthma). Mr. Hofmann joined eBioCare
in Sept 1999. It was successfully sold to a New York State based NASDAQ firm in
mid 2001. Prior to eBioCare, Mr. Hofmann work for the Robert Half International
as an outside consultant from 1996 until 1999 before joining eBioCare. Robert
Half International is the world's largest provider of accounting and financial
personnel for temporary and contract periods. Concurrently, he worked with the
United States Aid to International Development (USAID) a division of the United
States of America, Department of State from 1991-97.Additionally, Mr. Hofmann
has traveled extensively in Eastern Europe and Asia on various government and
NGO assignments. Mr. Hofmann attended San Francisco State College majoring in
Engineering.

                                       26
<PAGE>

The following is a list of the officers and directors of our wholly-owned
subsidiary:

Gary M DeLaurentiis        58       Chairman and President
Andrea G. Videtta          45       Director
Lisa A. Fitzpartick        37       Director

Committees

The Board of Directors has an Audit Committee and a Compensation Committee. The
primary function of the Audit Committee is to assist the Board of Directors in
fulfilling its oversight responsibilities by reviewing (1) the financial
information provided to shareholders and others, (2) systems of internal
controls established by management and the Board of Directors and (3) the audit
process. The primary function of the Compensation Committee is to establish and
administer our executive compensation programs. Mr. John R. Murray is a member
of both committees and is "independent" as that term is defined in Rule
4200(a)(14) of the National Association of Securities Dealers' listing
standards. The Board of Directors believes that Mr. Murray qualifies as an
"Audit Committee Financial Expert" as that term is defined by applicable SEC
rules.

         (b) Compliance with Section 16(a) of the Exchange Act.

                  Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's officers and directors and persons who own more
than 10% of a registered class of the Company's equity securities to file
reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with the
Securities and Exchange Commission (the "SEC"). Such officers, directors and 10%
shareholders are also required by SEC rules to furnish to the Company with
copies of all Section 16(a) reports they file.

Based solely on its review of the Company's files and its review of the EDGAR
filing system maintained by the SEC, the Company believes that during the fiscal
year ended December 31, 2002 16(a) filing requirements applicable to its
officers, directors and 10% shareholders were complied with.

ITEM 10. EXECUTIVE COMPENSATION

The following tables set forth certain information regarding our CEO and each of
our most highly-compensated executive officers whose total annual salary and
bonus for the fiscal years ending December 31, 2002, 2001 and 2000 that exceeded
$100,000:


                                       27
<PAGE>
<TABLE>
<CAPTION>
                         SUMMARY COMPENSATION TABLE

                                    Annual Compensation       Long-term Compensation
                                --------------------------  ----------------------------------------------
                                                    Other   Restricted   Securities   LTIP      All
                       Fiscal     Salary    Bonus  Annual    Stock       Underlying   Payouts  Other
Name                    Year        $        $      Comp.                Options(#)     $     Compensation
-------------------    ---------  --------- ----   -----    ----------  -----------  -------- ------------
<S>                    <C>        <C>       <C>    <C>      <C>         <C>          <C>      <C>
Gary M. DeLaurentiis   2002       140,000   $ -    $18,958              1,000,000             $ -
CEO                    2001        90,000            9,479
                       2000       133,200

Lisa Fitzpatrick       2002        52,500     -      -                     -                    -
V.P.                   2001             -     -      -
                       2000        45,472

Michael E. Hofmann     2002        72,000     -      -                    500,000               -
CFO
</TABLE>

AGGREGATE OPTIONS EXERCISED DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
AND FINANCIAL YEAR-END OPTION VALUES.

The following table sets out information relating to options exercised by the
above-referenced officers during the most recent financial year and the value of
unexercised in-the-money options held by such person as of December 31, 2002:

<TABLE>
<CAPTION>
                                                UNEXERCISED OPTIONS   VALUE OF UNEXERCISED IN-THE-
                    SECURITIES     AGGREGATE       AT FY-END (#)       MONEY OPTIONS AT FY-END($)
                   ACQUIRED ON      VALUE         EXERCISABLE/              EXERCISABLE/
  NAME             EXERCISE (#)    REALIZED($)    UNEXERCISABLE            UNEXERCISABLE (3)
--------------------------------------------------------------------------------------------------
<S>                <C>             <C>          <C>                    <C>
Gary M.
DeLaurentiis        Nil            Nil           1,000,000/0 (1)               $ 0/$ 0
--------------------------------------------------------------------------------------------------
Michael E.
 Hofmann            Nil            Nil             500,000/0 (2)               $ 0/$ 0
--------------------------------------------------------------------------------------------------
</TABLE>

(1) Represents presently exercisable options to purchase 1,000,000 shares of our
common stock at $0.18 per share.

(2) Represents presently exercisable options to purchase 500,000 shares of our
common stock at $0.18 per share.

(3) Assumes a fair market value of $ 0.06 per share of common stock, which was
the average price for our common stock on 31 December 2002.


                                       28
<PAGE>
OPTIONS GRANTED DURING MOST RECENT FINANCIAL YEAR.

The following table sets out information relating to options granted during the
most recent financial year to the above-referenced officers

<TABLE>
<CAPTION>
                 SECURITIES     % OF TOTAL                        MARKET VALUE OF       EXPIRATION
                   UNDER          OPTIONS        EXERCISE PER   SECURITIES UNDERLYING      DATE
     NAME         OPTIONS       GRANTED TO        SECURITY     OPTIONS ON THE DATE OF
                  GRANTED      EMPLOYEES IN      ($/SECURITY)  THE GRANT ($/SECURITY)
                              FINANCIAL YEAR
---------------------------------------------------------------------------------------------------
<S>               <C>            <C>               <C>           <C>                     <C>
Gary M.
DeLaurentiis      1,000,000        66.68%              (1)              $0.14            12/31/2007
---------------------------------------------------------------------------------------------------
Michael E.
Hofmann             500,000        33.32%              (2)              $0.14            12/31/2007
---------------------------------------------------------------------------------------------------
</TABLE>

(1) Represents presently exercisable options to purchase 1,000,000_shares of our
common stock at $0.18 per share.

(2) Represents presently exercisable options to purchase 500,000_shares of our
common stock at $0.18 per share.

COMPENSATION OF DIRECTORS

We do not have any plans in place to compensate our directors.

Employment Agreements

Itec has no employment agreements with its officers. During the fiscal year
ended December 31, 2002, Gary M. De Laurentiis was paid $140,000. Andrea G.
Videtta was paid $0.00, Lisa A. Fitzpatrick was paid $52,500, and Michael E.
Hofmann was paid $72,000. The officers and directors of Itec are reimbursed for
expenses paid or incurred by them on behalf of Itec.

The Company has no retirement, pension, profit sharing or insurance or medical
reimbursement plans covering its officers and directors.

Incentive Stock Option Plan

The Company has adopted an incentive stock option plan (the "Plan") under which
options granted are intended to qualify as "incentive stock options" under
Section 422A of the Internal Revenue Code of 1986, as amended (the "Code").
Pursuant to the Plan, options to purchase up to 45,455 shares of Company's
common stock may be granted to employees of the Company. The Plan is
administered by the Board of Directors which is empowered to determine the terms
and conditions of each option subject to the limitation of the exercise price
cannot be less than market value of the common stock on the date of grant (110%
of the market value in the case of options granted to an employee who owns 10%
or more of the Company's outstanding common stock) and no option can have a term
in excess of 10 years (5 years in the case of options granted to employees who
own 10% or more of the Company's common stock). As of the date hereof no options
have been granted under the Plan.

                                       29
<PAGE>

On May 28, 2001 the Company adopted the Beechport Capital Corp. 2001 Stock Plan
(the "2001 Plan") which covers the issuance of up to 1,000,000 shares of common
stock either directly or pursuant to options to eligible employees, directors,
officers of and consultants and advisors to the Company. The purpose of the 2001
Plan is to promote the best interest of the Company and its stockholders by
providing a means of non-cash remuneration to selected eligible participants.
The shares covered under the 2001 Plan have been registered on Form S-8 under
the Act. Between June and August 2001 the Company issued an aggregate of 842,000
registered shares under the 2001 Plan to 6 persons as compensation for services.
On September 12, 2001 the 2001 Plan was amended to increase the issuance to
2,100,000 shares.

On May 1, 2002 the Company adopted the Beechport Capital Corp. 2002 Stock Plan
(the "2002 Plan") which covers the issuance of up to 2,000,000 shares of common
stock either directly or pursuant to options to eligible employees, directors,
officers of and consultants and advisors to the Company. The purpose of the 2002
Plan is to promote the best interest of the Company and its stockholders by
providing a means of non-cash remuneration to selected eligible participants.
The shares covered under the 2002 Plan have been registered on Form S-8 under
the Act. On October 29, 2002 the 2002 Plan was amended to increase the issuance
to 6,000,000 shares. During calendar year 2002 the Company issued an aggregate
of 5,500,000 registered shares under the 2002 Plan to 5 persons as compensation
for services.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of December 31, 2002 the stock ownership of
each person known by the Company to be the beneficial owner of 5% or more of the
Company's common stock, each director individually and all directors and
officers of the Company as a group based upon a total of 41,997,068 outstanding
shares as of such date.

  Name and Address                     Amount and Nature of         Percentage
of Beneficial Owner                     Beneficial Owner            of Class
-------------------                    --------------------         ----------
Gary M. De Laurentiis                      2,354,803 (1)               5.6%
14699 Holman Mountain Road
Jamestown, California  95327

Andrea G. Videtta                            592,027                   1.4%
Vico Lungo Trinita degli Spagnoli 18a
80134 Napoli, Italy

Lisa Ann Marie Fitzpatrick                   465,639 (1)               1.1%
12933 150th Court North
Jupiter, Florida  33478

John R. Murray                                     0                   0.0%
7 Maxson Ave.
Locust, NJ 07760

Michael E. Hofmann                                 0                   0.0%
13330 Valley Home Rd
Valley Home, Ca 95361

All Directors and Officers                 3,412,469                   8.1%
as a Group (5 persons)

                                       30
<PAGE>

---------------
(1) Mr. De Laurentiis is the father of Ms. Fitzpatrick and disclaims beneficial
ownership of all shares held by her.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Pursuant to an agreement effective April 25, 2000 between Itec and Glenwood
Marketing Association, Inc. ("GMA") (the "GMA Agreement"), GMA made a loan to
the Company of $1,100,000. From the $1,100,000 loan Itec agreed to pay $200,000
of fees to GMA. The loan bears interest at 10% per annum, payable in monthly
interest only payments for 36 months. Itec agreed to amend its Articles of
Incorporation to allow the issuance of preemptive and preferential rights to GMA
to purchase shares pursuant to approval of the Board of Directors. Itec also
agrees to promulgate a resolution of the Board to convey to GMA 20% of Itec's
issued and outstanding common stock and to vest GMA with preferential rights to
acquire additional shares at no cost to GMA when additional shares were issued,
so as to maintain GMA's stock ownership position at 20% of the issued and
outstanding common stock of Itec. Pursuant to the GMA Agreement, GMA's interest
shall not be diluted except that this provision shall not apply if Itec's stock
becomes publicly traded. Itec further agreed to pay GMA a $20,000 per month
consulting fee for a period of 24 months to allow GMA to appoint one member of
Itec's Board of Directors and to grant GMA the right of first refusal on leasing
of all machines build by the manufacturer of the equipment related to the
License Agreement. According to the terms of the GMA Agreement, Itec was to
become publicly traded within 12 months of the loan agreement at which time all
the officers and directors of Itec would agree to a two year lockup of their
stock. GMA agreed to convert the loan to preferred stock upon Itec becoming a
public company. The preferred stock was to contain provisions for redemption
suitable to both parties. Itec also agreed that at least two of the Board
members would approve verbally expenditures of more than $5,000. The GMA
Agreement also contains a covenant to indemnify GMA with respect to losses it
may incur in connection with the conduct of its business with Itec.

On July 5, 2000, Itec's Board of Directors approved and authorized Itec to loan
up to $250,000 to Gary M. De Laurentiis, President and a director of the
Company. The loan is unsecured, with interest only payable for 10 years and the
total principal due at the end of that period. As of December 31, 2002 principal
in the amount of $236,973 had been advanced by the Company and interest had been
waived.


                                       31
<PAGE>

ITEM 13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(1)       Exhibits:

       Exhibit
        Number                          Description
       -------                          -----------
         2.1      Share Exchange Agreement dated May 4, 2001 by and between the
                  Company and Itec International Technologies, Inc.
                  (Incorporated by reference to Exhibit 2.1 of the Registrant's
                  Current Report on Form 8-K dated May 29, 2001 and filed May
                  29, 2001.)


         3.1      Articles of Incorporation (Incorporated by reference to
                  Registrant's Form S-18 Registration Statement, File
                  No. 33-31067.)

         3.2      Bylaws (Incorporated by reference to Registrant's Form S-18
                  Registration Statement, File No. 33-31067)

         10.1     Beechport Capital Corp. 2001 Stock Plan dated May 28, 2001
                  (Incorporated by reference to Registrant's Form S-8
                  Registration Statement, File No. 333-62520.)

         10.2     Regulation S Stock Purchase Agreement dated December 20, 2001
                  (Incorporated by reference to Registrant's Annual Report on
                  Form 10-KSB for year ended December 31, 2001)

         10.3     Beechport Capital Corp. 2002 Stock Plan dated May 1, 2002
                  (Incorporated by reference to Registrant's Form S-8
                  Registration Statement, File No. 333-87776)

         10.4     Beechport Capital Corp. 2002 Stock Plan dated October 29, 2002
                  (Incorporated by reference to Registrant's Form S-8
                  Registration Statement, File No. 333-100946)

         23.1	  Consent of Henry Schiffer, CPA

         31.1     Certification of Chief Executive Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002

         31.2     Certification of Chief Financial Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002

         32.1     Certification of Chief Executive Officer pursuant to Section
                  906 of the Sarbanes-Oxley Act of 2002

         32.2     Certification of Chief Financial Officer pursuant to Section
                  906 of the Sarbanes-Oxley Act of 2002


                                       32

<PAGE>

(2)       Financial Statements filed herein

          Accountant's Report                                              F-2

          Financial Statements

            Balance Sheets -Assets,                                        F-3
              Liabilities and Stockholders' Equity                         F-4
            Statements of Operations           `                           F-5
            Statements of Stockholders' Equity                             F-6
            Statements of Cash Flows                                       F-7

            Notes to Consolidated Financial Statements                     F-8

(3)       Reports on Form 8-K

          No reports were filed during the quarter ended December 31, 2002.


ITEM 14.  CONTROLS AND PROCEDURES

We maintain a comprehensive set of disclosure controls and procedures (as
defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of
1934 ("Exchange Act") and internal controls designed to ensure that information
required to be disclosed in our filings under the Exchange Act is recorded,
processed, summarized and reported accurately and within the time periods
specified in the SEC's rules and forms. As of Feb. 28, 2003 (the "Evaluation
Date"), an evaluation was carried out under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures. Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that, as of the
Evaluation Date, the design and operation of these disclosure controls and
procedures were effective to provide reasonable assurance of the achievement of
the objectives described above.

Subsequent to the Evaluation Date, there were no significant changes in internal
controls or other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.



                                       33

<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant caused this amended Report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                   Itec Environmental Group, Inc.
                                            (Registrant)


Dated: February 9, 2004             By: /s/ Gary M. De Laurentiis
                                      -------------------------
                                      Gary M. De Laurentiis
                                      Chief Executive Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
as amended has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.

         Signature               Title                         Date

/s/ Gary M. De Laurentiis        Chief Executive Officer   February 9, 2004
-------------------------        and Director
Gary M. De Laurentiis


/S/ Michael E. Hofmann           Chief Financial Officer   February 9, 2004
------------------
Michael E. Hofmann


/s/ Andrea G. Videtta            Director                  February 9, 2004
-------------------------
Andrea G. Videtta


/s/ Lisa Ann Marie Fitzpatrick   Director                  February 9, 2004
------------------------------
Lisa Ann Marie Fitzpatrick


/s/ John R. Murray               Director                  February 9, 2004
-------------------------------
John R. Murray



                                       34
<PAGE>





                          INDEX TO FINANCIAL STATEMENTS

                         ITEC ENVIRONMENTAL GROUP, INC.
                          A Development Stage Company


FINANCIAL STATEMENTS - December 31, 2002 and 2001


REPORT OF INDEPENDENT ACCOUNTANTS                                      F-2

FINANCIAL STATEMENTS

      BALANCE SHEET                                                    F-3

      STATEMENTS OF INCOME                                             F-5

      STATEMENT OF STOCKHOLDERS' EQUITY                                F-6

      STATEMENTS OF CASH FLOWS                                         F-7

      NOTES TO FINANCIAL STATEMENTS                                F-8 to F-19





                                      F-1




<PAGE>


                REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT

The Shareholders
ITEC ENVIRONMENTAL GROUP,INC
(A Development-Stage Company)


I have audited the accompanying consolidated balance sheet of ITEC ENVIRONMENTAL
GROUP, INC (A Development-Stage Company) for the twelve months ending December
31, 2002 and 2001 and the related consolidated statements of income and changes
in stockholders' equity, and cash flows for the period ended December 31, 2002
and 2001 in accordance with Statements on Auditing Standards issued by the
American Institute of Certified Public Accountants. These financial statements
are the responsibility of management. My responsibility is to express an opinion
on these financial statements based on my audit. Other Auditors, whose report,
dated April 3, 2001, expressed an opinion on these financial statements, audited
the financial statements of Itec for the period from inception on March 28, 2000
through December 31 2000. The financial statements for the period from inception
on March 28, 2000 through December 31 2002 reflect a loss of $6,394,556 of the
total net loss from inception. The other auditors' report has been furnished to
us, and my opinion, insofar as it relates to the amounts included for such prior
periods, is based solely on the report of the other auditors.

I conducted my audit in accordance with auditing standards generally accepted in
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audits provide a reasonable basis for my
opinion.

In my opinion, the consolidated financial statements for the twelve months ended
December 31, 2002 and 2001 present fairly, the consolidated financial position
of ITEC ENVIRONMENTAL GROUP, INC., (a development stage company), and the
results of its consolidated operations, stockholders' equity and cash flows for
the years then ended in conformity with generally accepted accounting principles
consistently applied.

The accompanying consolidated financial statements have been prepared assuming
that the company will continue as a going concern. As discussed in the Notes to
the consolidated financial statements, the Company has sustained losses from
initial startup costs and has a lack of substantial capital that raises
substantial doubt about its ability to continue as a going concern. Management
plans to pursue financing arrangements and aggressive sales of equipment to
remedy the capital and loss circumstances. The consolidated financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

/s/ Henry Schiffer, CPA
-----------------------
Henry Schiffer, CPA
An Accountancy Corporation

Beverly Hills, California
March 28, 2003

                                       F-2
<PAGE>




                  ITEC ENVIRONMENTAL GROUP, INC. AND SUBSIDIARY
                           A DEVELOPMENT STAGE COMPANY
                           CONSOLIDATED BALANCE SHEETS


                                                     DECEMBER 31,   DECEMBER 31,
                                                        2002           2001
                                                     -----------    -----------
                ASSETS
Current Assets
        Cash and cash equivalents                    $       393    $     4,253
        Accounts Receivable (net)                         14,828         36,951
        Inventory                                        221,434
        Employee Advance                                   8,000              0
                                                     -----------    -----------
                Total current assets                     244,655         41,204
Fixed Assets
        Furniture and equipment net of
        Depreciation of $3,321-2001, 13,675-2002         123,220         11,959
                                                     -----------    -----------
                Total fixed assets                       123,220         11,959
Other Assets
        License Fee                                       25,000         35,000
        Note Receivable-President                        236,973        236,973
        Allowance for doubtful notes                    (121,480)      (168,814)
        Deposits                                           5,153
        Prepaid Expenses                                  10,472
        Other-(Misc.)                                     40,589          7,565
                                                     -----------    -----------
                Total other assets                       196,707        110,724
                                                     -----------    -----------
                Total Assets                         $   564,584     $  163,887
                                                     ===========    ===========



See accompanying notes to financial statements.

                                      F-3

<PAGE>



                 ITEC ENVIRONMENTAL GROUP, INC. AND SUBSIDIARY
                          A DEVELOPMENT STAGE COMPANY
                           CONSOLIDATED BALANCE SHEETS, Continued


                                                     DECEMBER 31,   DECEMBER 31,
                                                        2002           2001
                                                     -----------    -----------
                LIABILITIES & STOCKHOLDERS' (DEFICIT)
Current Liabilities
        Accounts Payable                             $   782,995    $   524,120
        Accrued Liabilities                              112,449        122,419
                                                     -----------    -----------
                Total Current Liabilities                895,444        646,539
Other Liabilities
        Note Payable G M A                             1,100,000      1,100,000
        Note Payable Italian Investors                   815,230        815,230
        Deferred Revenue                                 170,000        129,875
        Other                                            145,058          -
                                                     -----------    -----------
                Total Other Liabilities                2,230,288      2,045,105
                                                     -----------    -----------
                Total Liabilities                      3,125,732      2,691,644
                                                     -----------    -----------

Stockholders' (Deficit)
        Preferred Stock, $0.001 par value,
          10,000,000 shares authorized                         0
        Common Stock, $0.001 par value
          750,000,000 shares authorized
          41,997,068 outstanding at 12/31/02             254,715        191,688
        Paid In Capital                                3,578,693      1,111,380
        (Deficit) accumulated during
          Development stage                           (6,394,556)    (3,830,824)
                                                     -----------    -----------
                Total Stockholders' Deficit           (2,561,148)    (2,527,755)
                                                     -----------    -----------
                Total Liabilities & Stockholders'
                   Deficit                           $   564,584    $   163,887
                                                     ===========    ===========




See accompanying notes to financial statements.

                                      F-4


<PAGE>


<TABLE>
<CAPTION>
                  ITEC ENVIRONMENTAL GROUP, INC. AND SUBSIDIARY
                           A DEVELOPMENT STAGE COMPANY
                        CONSOLIDATED STATEMENT OF INCOME
                            AND COMPREHENSIVE INCOME
                                                                       For the period
                                                                       from Inception
                                            12 MONTHS ENDED           (March 28, 2000)
                                      --------------------------          through
                                      DECEMBER 31,      DECEMBER 31,    DECEMBER 31,
                                         2002              2001             2002
                                      -----------       -----------     ------------
<S>                                   <C>               <C>            <C>
Revenues                              $    24,048       $         -    $      24,048
Interest Income                             -
                                      -----------       -----------     ------------
        Total Income                       24,048                 0           24,048

Cost of Goods                              16,706                             16,706

Gross Profit                                7,342                              7,342

Operating Expenses
    Consulting Fees                       921,350         1,416,704        2,458,054
    Advertising                             1,087            30,360           31,447
    Auto expense                               44             1,273            1,317
    Payroll                               498,324           268,867        1,062,476
    International Contract Expenses       118,346           192,387          310,733
    Professional Fees                     213,557            98,859          578,621
    Research and Development               12,740            60,000          111,740
    Travel & Entertainment                 80,154            77,494          378,208
    Engineering                           137,563            66,569          204,132
    Telephone                              32,510            31,978           64,488
    Insurance                              13,277            27,451           50,881
    Rent / Utilities                        5,286            21,964           29,250
    Depreciation & Amortization            18,082            18,322           36,404
    Bad Debt                                                                 168,815
    Licenses and Permits                      503               365              868
    Other-(Misc.)                          88,276            22,678          165,333
    Interest Expense                      237,001            73,650          350,203
    Debt Placement Cost                   192,834                -           392,834
    Currency Conversion Net Loss              140             5,954            6,094
                                      -----------       -----------      -----------
        Total Operating Expenses        2,571,074         2,416,875       6,401,898

         Total Net Income (Loss)      $(2,563,732)      $(2,416,875)    $(6,394,556)
                                      ===========       ===========     ============

Shares Outstanding                     41,997,068        12,692,000
EPS                                   $    (0.061)      $    (0.190)
Fully Diluted                         $    (0.058)      $    (0.190)
</TABLE>

See accompanying notes to financial statements.

                                      F-5

<PAGE>


<TABLE>
<CAPTION>
                  ITEC ENVIRONMENTAL GROUP, INC. AND SUBSIDIARY
                           A DEVELOPMENT STAGE COMPANY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     FOR THE PERIOD ENDED DECEMBER 31, 2002


                                   ADDITIONAL
                                   NO. OF COMMON     STOCK      PAID-IN      ACCUMULATED
                                   STOCK SHARES      AMOUNT     CAPITAL        DEFICIT        TOTAL
                                   -------------------------------------------------------------------
<S>                                <C>              <C>        <C>          <C>            <C>
Balance at December 31, 2000          6,651,987       1,000           -     $(1,413,949)   $(1,412,949)

Net Loss for the period ended
   December 31, 2001                                                         (2,416,875)    (2,416,875)

Common Stock issued reorganization
    May, 2001                         3,348,013     190,688        13,600                      204,288

Common Stock issued for services
    December 31, 2001                 2,692,000                 1,097,780                    1,097,780

Balance at December 31, 2001         12,692,000     191,688     1,111,380    (3,830,824)    (2,527,756)

Net Loss for the period ended
   December 31, 2002                                                         (2,563,732)    (2,563,732)

Common Stock issued for service
    December 31,  2002                6,200,000       6,200       993,768                      999,968

Common Stock issued for debt
    December 31, 2002                23,105,068      56,827     1,473,545                    1,530,372
                                   -------------------------------------------------------------------

Balance at December 31, 2002         41,997,068    $254,715    $3,578,693   $(6,394,556)   $(2,561,148)
                                   ===================================================================
</TABLE>



See accompanying notes to financial statements.

                                      F-6




<PAGE>


<TABLE>
<CAPTION>
                  ITEC ENVIRONMENTAL GROUP, INC. AND SUBSIDIARY
                           A DEVELOPMENT STAGE COMPANY
                             STATEMENT OF CASH FLOWS

                                                                                          For the period
                                                                                          from Inception
                                                               12 MONTHS ENDED           (March 28, 2000)
                                                           --------------------------        through
                                                           DECEMBER 31,    DECEMBER 31,    DECEMBER 31,
                                                              2002            2001             2002
                                                           -----------     -----------   ---------------
<S>                                                        <C>             <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net Income (Loss)                                      $(2,563,732)    $(2,416,875)  $(6,394,556)
        Adjustments to reconcile net income
        (loss) to net cash (used in)
        provided by operating activities:
         Common stock issued for fees and services           1,440,740       1,061,250     2,501,990
         Increase/Decrease in Accounts Receivable               90,281         (90,109)      168,987
         Increase/Decrease in Inventory                       (221,434)                     (221,434)
         Increase/Decrease in Prepaid Expenses                 (10,472)         65,504        55,032
         Increase/Decrease in Other Assets                        (435)         (7,565)       82,450
         Increase/Decrease in Accounts Payable              (1,029,422)       (734,013)   (1,700,335)
         Increase/Decrease in Accrued Liabilities               43,928         177,147       221,075
         Increase/Decrease in Deferred Revenue                  40,125         124,848       164,973
                                                           -----------     -----------    -----------
    Net cash (used in) provided by operating activities     (2,294,502)     (1,735,732)   (5,121,818)
                                                           -----------     -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES
         P P & E                                              (111,261)        (11,959)     (123,220)
         License Fee                                            10,000          (1,667)        8,333
         Deposits                                               (5,154)                       (5,154)
         Notes Receivable                                     (133,283)                    1,241,378
                                                           -----------     -----------    -----------
Net cash used in investing activities                         (239,698)        (13,626)    1,121,337
                                                           -----------     -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES
        Issuance of common stock                                63,027                        64,027
        Additional Paid In Capital                           2,467,312       1,097,780     3,565,092
        Note payable                                                           371,754       371,754
                                                           -----------     -----------    -----------
    Net cash (used in) provided by financing activities      2,530,339       1,469,534     4,000,873
                                                           -----------     -----------    -----------
    Net increase in cash                                                           -             393

    Net decrease in cash                                        (3,861)       (279,824)

    Cash, beginning of period                                    4,253         284,077           0
                                                           -----------     -----------  -------------

    Cash, end of period                                    $       393     $     4,253   $       393
                                                           ===========     ===========   ============
</TABLE>

See accompanying notes to financial statements.
                                      F-7
<PAGE>


                  ITEC ENVIRONMENTAL GROUP, INC AND SUBSIDIARYS
                          (A Development-Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

This summary of significant accounting policies of Itec Environmental Group,
Inc. (f/k/a Beechport Capital Corp.) and Subsidiary is presented to assist in
understanding the Company's financial statements and is stated in United States
dollars. The financial statements and notes are representations of the Company's
management who is responsible for their integrity and objectivity. These
accounting policies conform to generally accepted accounting principles in the
United States of America and have been consistently applied in the preparation
of the financial statements.

     (a) General
         -------

Beechport Capital Corp. ("Beechport") was organized as a Colorado corporation on
January 24, 1989, in order to evaluate, structure and complete a merger with or
acquisition of, prospects consisting of private companies, partnerships or sole
proprietorships.

ITEC Environmental Group, Inc. ("Itec") was incorporated under the laws of the
State of Delaware on March 28, 2000. Itec was formed for the purpose of
acquiring certain patented technology and the development of a worldwide market
for its usage.

At a special September 27, 2002 meeting of the shareholders of Beechport Capital
Corp., the Company authorized changing its name by merging into its wholly-owned
subsidiary Itec Environmental Group, Inc. thus changing the domicile of the
Company from Colorado to Delaware.

The Company's business plan is to attempt to build on the foundation of the
patented technology and proprietary equipment and to form strategic alliances
and a management team to become a worldwide supplier of oil and agricultural
chemical container recycling equipment and related systems. The Company's
initial marketing of the technology will be concentrated in Italy but is
intending to market in the future in the United States and other countries. The
Company has elected to use a stage development company since planned principal
operations have not yet commenced.

The Company's subsidiary, ECO2 Environmental Systems, Inc. ("ECO2") was
incorporated under the laws of the State of Delaware on April 10, 2000. The only
activity to date was the registration of a trademark for ECO2.

     Unless the context indicates otherwise all references herein to the Company
include Itec Environmental Group, Inc. its predecessor Beechport Capital Corp.
and its wholly-owned subsidiary ECO2 Environmental Systems, Inc.


                                      F-8

<PAGE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     (b)  Per Share Information
          ---------------------

Basic net earnings (loss) per common share is computed by dividing net earnings
(loss) applicable to common shareholders by the weighted-average number of
common shares outstanding during the period. Diluted net earnings (loss) per
common share is determined using the weighted-average number of common shares
outstanding during the period, adjusted for the dilutive effect of common stock
equivalents, consisting of shares that might be issued upon exercise of common
stock options or warrants.

     (c)  Furniture and Equipment
          -----------------------

Property and equipment are recorded at cost. Depreciation is provided over the
estimated useful lives of the related assets using the straight-line method for
financial statement purposes. The Company uses other depreciation methods
(generally, accelerated depreciation methods) for tax purposes where
appropriate. Amortization of leasehold improvements is computed using the
straight-line method over the shorter of the remaining lease term or the
estimated useful lives of the improvements.

     (d)  Revenue and Expense Recognition
          -------------------------------

As of December 31, 2002, the Company had revenue of $24,000. The Company intends
to recognize revenues from sales of equipment upon delivery as per SAB 101.

Amounts billed in advance of the period in which a service is rendered or a
product is delivered are recorded as a liability under "Deferred Revenue". At
December 31, 2002, deferred revenue totaled $170,000 for the sale of ECO2
systems not yet shipped.

The Company adopted SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information". The Company intends to contract with others for the
manufacturing of the equipment. General and administrative expenses and the
costs of advertising are expensed as incurred.

The Company adopted SFAS No. 52, "Foreign Currency Translation". We have
determined that there is no currency risk due to sales being based and paid in
U. S. dollars.

     (e)  Concentrations
          --------------

Financial instruments that potentially subject the company to concentrations of
credit risk consist principally of temporary cash investments and cash
equivalents and trade accounts receivables. At December 31, 2002, the Company
had no amounts of cash or cash equivalents in U.S. financial institutions in
excess of amounts insured by agencies of the U.S. Government. At December 31,
2002 the Company had trade receivables of $51,000 from domestic customers.
Future trade receivables are expected to be principally from customers in Italy.
Since initial anticipated customers will be from one geographic location, a
concentration of credit risk could exist due to potential changes in economic
activity in that area. The Company does not require collateral for its trade
accounts receivables.

                                      F-9
<PAGE>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     (f)  Cash Equivalents
          ----------------

The Company considers all short-term investments in securities that mature in 90
days or less to be cash equivalents.

     (g)  Allowance for Doubtful Accounts
          -------------------------------

An allowance for doubtful accounts is provided to reflect potential
uncollectible receivables. Provision for doubtful accounts at December 31, 2002
is $186,605 of which $121,480 is for a note receivable from an officer
stockholder without adequate collateral.

     (h)  Use of Estimates in the Preparation of Financial Statements
          -----------------------------------------------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

     (i)  Geographic Area of Operations
          -----------------------------

The Company operates its business principally in Italy. The potential for severe
financial impact can result from negative effects of economic conditions within
the markets or geographic areas. Since the Company's business is principally in
one area, this concentration of operations results in an associated risk and
uncertainty.

     (j)  Goodwill and Intangible Assets
          -----------------------------

The Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets," which
requires that goodwill and intangible assets with indefinite lives no longer be
amortized but rather be reviewed annually, or more frequently if impairment
indicators arise, for impairment. Separable intangible assets that are not
deemed to have an indefinite life will continue to be amortized over their
useful lives. In assessing the recoverability of the Company's goodwill and
intangibles, the Company must make assumptions regarding estimating the fair
value of the respective assets. If these estimates or assumptions change in the
future, the Company may need to record an impairment charge for these assets. An
impairment charge would reduce operating income in the period it was determined
that the charge was needed.

     (k) Deferred Tax Assets
         -------------------

The Company records its federal and state tax liability in accordance with
Financial Accounting Standards Board Statement No. 109 "Accounting for Income
Taxes". The deferred taxes payable are recorded for temporary differences
between the recognition of income and expenses for tax and financial reporting
purposes, using current tax rates.

                                      F-10

<PAGE>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     (k) Deferred Tax Assets, continued
         -------------------

Deferred assets and liabilities represent the future tax consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled.

Since its inception, Itec has an accumulated loss of $6,394,555 for income tax
purposes, which can be used to offset future taxable income through 2021. The
potential tax benefit of this loss is estimated as follows:

            2001 Net Operating Loss Carryforward      $  3,830,823
            2002 Net Operating Loss                      2,563,732
                                                      ------------
            2002 Net Operating Loss Carryforward      $  6,394,555

          Future tax benefit based on 35% Federal     $  2,238,094
          Valuation allowance                           (2,238,094)
                                                      ------------
          Net tax benefit                             $          0
                                                      ============

As of December 31, 2002, no deferred tax assets or liabilities are recorded in
the accompanying financial statements.


     (l) Development Stage Company
         ------------------------

The Company adopted SFAS No. 7 "Accounting and Reporting by Development Stage
Enterprises". This Statement specifies the guidelines for identifying an
enterprise in the development stage and the standards of financial accounting
and reporting for such an enterprise. This Statement requires development stage
companies to do their accounting and to prepare their financial statements using
the same accounting principles as established operating companies.

     (m) Future Impact of Recently Issued Standards
         ------------------------------------------

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. SFAS No. 143 requires that we record the fair value of an asset
retirement obligation as a liability in the period in which we incur a legal
obligation associated with the retirement of tangible long lived assets that
resulted from the acquisition, construction, development, and/or normal use of
the assets. We would also record a corresponding asset that is depreciated over
the life of the asset. Subsequent to the initial measurement of the asset
retirement obligation, the obligation will be adjusted at the end of each period
to reflect the passage of time and changes in the estimated future cash flows
underlying the obligation. Our adoption of SFAS No. 143 effective October 1,
2002 did not have a significant impact on our financial statements. However, in
the event that we make alterations to certain leased facilities in the future,
our landlord may be entitled to require us to restore the property upon
termination of the related lease at our expense. As such, any significant
alterations might have a material impact on our consolidated financial
statements.

                                      F-11
<PAGE>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     (m) Future Impact of Recently Issued Standards, continued
         ------------------------------------------

In July 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets. SFAS No. 142 requires that goodwill and intangible assets with
indefinite useful lives no longer be amortized, but instead be tested for
impairment at least annually in accordance with the provisions of SFAS No. 142.
SFAS No. 142 also requires that intangible assets with definite useful lives be
amortized over their respective estimated useful lives to their estimated
residual values, and reviewed for impairment in accordance with SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of. Goodwill and other intangible assets acquired in business
combinations completed before July 1, 2001 are amortized until the adoption of
SFAS No. 142, after which only intangible assets with definite useful lives will
continue to be amortized. Our adoption of SFAS No. 142 effective on October 1,
2002 did not result in a transitional impairment charge, change of useful lives
or residual values of intangible assets acquired, or the reclassification of
existing intangible assets to conform with new classification criteria in SFAS
No. 141. We will perform an annual goodwill impairment test during the fourth
quarter of each fiscal year. There can be no assurance that at the time the test
is completed an impairment charge may not be recorded.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which supersedes both SFAS Statement No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of, and the accounting and reporting provisions of APB Opinion No.
30, Reporting the Results of Operations--Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions, for the disposal of a segment of a business (as
previously defined in that Opinion). SFAS No. 144 retains the fundamental
provisions in SFAS No. 121 for recognizing and measuring impairment losses on
long-lived assets held for use and long-lived assets to be disposed of by sale,
while also resolving significant implementation issues associated with SFAS 121.
For example, SFAS No. 144 provides guidance on how a long-lived asset that is
used as part of a group should be evaluated for impairment, establishes criteria
for when a long-lived asset is held for sale, and prescribes the accounting for
a long-lived asset that will be disposed of other than by sale. SFAS No. 144
retains the basic provisions of APB No. 30 on how to present discontinued
operations in the statement of operations but broadens that presentation to
include a component of an entity (rather than a segment of a business). Unlike
SFAS No. 121 an impairment assessment under SFAS No. 144 will never result in a
write-down of goodwill. Rather, goodwill is evaluated for impairment under SFAS
No. 142, Goodwill and Other Intangible Assets. We adopted the provisions of SFAS
No. 144 effective October 1, 2002. The adoption of SFAS No. 144 did not have a
significant impact on our Consolidated Financial Statements.

                                      F-12

<PAGE>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     (m) Future Impact of Recently Issued Standards, continued
         ------------------------------------------

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities. SFAS No. 146 revises the accounting for specified
employee and contract terminations that are part of restructuring activities and
nullifies Emerging Issues Task Force (EITF) Issue 94-3, Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity.
Companies will be able to record a liability for a cost associated with an exit
or disposal activity only when the liability is incurred and can be measured at
fair value. Commitment to an exit plan or a plan of disposal expresses only
management's intended future actions and therefore does not meet the requirement
for recognizing a liability and related expense. SFAS No. 146 only applies to
termination benefits offered for a specific termination event or a specified
period. It will not affect accounting for the costs to terminate a capital
lease. We are required to adopt SFAS No. 146 for exit or disposal activities
initiated after December 31, 2002. We are evaluating this new standard but
expect that the effects of adoption, if any, would relate solely to exit or
disposal activities undertaken in the future.

In November 2002, the FASB issued Interpretation No. 45 (FIN 45), Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness to Others, an interpretation of FASB Statements No.
5, 57 and 107 and a rescission of FASB Interpretation No. 34. FIN 45 elaborates
on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees issued. FIN 45 also clarifies
that a guarantor is required to recognize, at inception of a guarantee, a
liability for the fair value of the obligation undertaken. The initial
recognition and measurement provisions of FIN 45 are applicable to guarantees
issued or modified after December 31, 2002 and are not expected to have a
material effect on our Financial Statements.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation--Transition and Disclosure--an amendment of FASB Statement No. 123.
SFAS No. 148 amends SFAS No. 123, Accounting for Stock Based Compensation and
provides alternative methods for accounting for a change by registrants to the
fair value method of accounting for stock-based compensation. Additionally, SFAS
No. 148 amends the disclosure requirements of SFAS No. 123 to require disclosure
in the significant accounting policy footnote of both annual and interim
financial statements of the method of accounting for stock-based compensation
and the related pro-forma disclosures when the intrinsic value method continues
to be used. SFAS No. 148 is effective for fiscal years ended after December 15,
2002, and disclosures are effective for the first fiscal quarter beginning after
December 15, 2002. We do not believe that adoption of SFAS No. 148 will have a
material effect on our financial condition or results of operations. We will
continue to apply the intrinsic value method of accounting prescribed by APB No.
25, Accounting for Stock Issued to Employees.


                                      F-13
<PAGE>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     (m) Future Impact of Recently Issued Standards, continued
         ------------------------------------------

In January 2003, the FASB issued Interpretation No. 46 (FIN 46), Consolidation
of Variable Interest Entities, an interpretation of ARB No. 51. FIN 46 addresses
the consolidation by business enterprises of variable interest entities as
defined in the Interpretation. FIN 46 is effective for all new variable interest
entities created or acquired after January 31, 2003. For variable interest
entities created or acquired prior to February 1, 2003 the provisions of FIN 46
must be applied for the first interim period beginning after June 15, 2003. The
application of FIN 46 is not expected to have a material effect on the Company's
condensed consolidated financial statements. The Company does not have any
variable interest entities, therefore this Interpretation is not expected to
have an impact on its consolidated financial statements.


NOTE 2 -  BASIS OF PRESENTATION - GOING CONCERN

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation of the
Company as a going concern. However, the Company has suffered recurring losses
from operations and has a net capital deficiency that raises substantial doubt
about the Company's ability to continue as a going concern. Management is
attempting to raise additional equity.

In view of these matters, continuing, as a going concern is dependent upon the
Company's ability to meet its financing requirements, raise additional capital,
and the success of its future operations or completion of a successful business
combination. Management believes that actions planned and presently being taken
to raise additional capital will provide the opportunity for the Company to
continue as a going concern.


NOTE 3 - COMMON STOCK

The Articles of Incorporation of Itec authorize a maximum of 750,000,000 shares
of $0.001 par value common stock and 10,000,000 shares of $0.001 par value
preferred stock. Each share of common stock is entitled to one voting right, the
right to share in earnings, and the right to share in assets upon liquidation.
At December 31, 2002, 41,997,068 shares of common stock were issued and
outstanding.

On April 1, 2000, Itec entered into stock subscription agreements for the
issuance of 1,000 shares at $1.00 per share.

On July 3, 2000 Itec's Board of Directors approved the Company entering into
loan/investment agreements with various Italian investors not to exceed
$875,000. The Board also authorized the payment of a 10% commission on the funds
raised by the loan/investment agreements. The term of the loans as agreed to by
the Board would be three years. Interest would be payable monthly with the total
principal due in three years. The investors would have the right to participate
in future issuances of common stock on a pro rata basis, except that this
provision shall not apply prior to a business combination transaction in which
the common stock of Itec would become publicly traded, or if Itec were to
consummate an initial public offering.

                                      F-14
<PAGE>

NOTE 3 - COMMON STOCK, Continued

On July 15, 2000, the Board also authorized the issuance of up to 15% of Itec's
common stock to the various Italian investors. In lieu of Itec's entering into
loan/investment agreements described above, a revised agreement between Itec's
President and the Italian investors was used which allowed participants in the
Italian GPDP Program to make loans at a rate of $5,500 per share of Itec common
stock. Funds thus generated (approximately $815,230 at March 31, 2002) were to
be repaid when Itec became a public company. Upon repayment of the advances, the
investors would retain their stock ownership. To comply with various Italian
regulations, Itec's President personally issued shares of Itec's common stock to
the Italian investors. The funds advanced from the investors were deposited in
accounts in ITEC's President's name and the advances were to Itec's President.
Due to the substance of the transaction over its form, the transactions have
been shown as Itec transactions with the cash balances and advances payable
recorded on the financial statements. Itec's President has represented that the
funds received are assets of Itec and Itec has assumed the related obligations.

On May 4, 2001 Beechport entered into a share exchange agreement with Itec to
acquire all the issued and outstanding shares of common stock of Itec in
exchange for 6,651,987 shares of Beechport's common stock. This business
combination resulted in the shareholders of ITEC owning approximately 66.5% of
the issued and outstanding shares of the Company's common stock (10,000,000
shares were outstanding upon completion of the transaction), and the Company
holding 100% of the issued and outstanding shares of Itec's common stock.

This transaction is a recapitalization of ITEC, with no revaluation of assets
and liabilities. Beechport was a shell corporation and therefore the acquisition
was not recorded as a purchase transaction.

On May 28, 2001, the Company adopted the Beechport Capital Corp. 2001 Stock
Plan, which covers the issuance of up to 1,000,000 shares of common stock,
either directly or pursuant to options, to eligible employees, directors,
officers, consultants and advisors of the Company. The purpose of the plan is to
promote the best interest of the remuneration to selected eligible participants.
On June 7, 2001, the Company filed a registration statement on Form S-8 (File
No. 333-62520) to register the shares covered under the Plan.

In June and September of 2001 the Board authorized the issuance of up to
2,100,000 shares under S-8 filings for services performed for the Company.
1,992,000 shares were issued in early July. The Company's stock was trading in
the range of $0.50 to $0.90 with a five-day average of $0.72 per share. The
discount allowed was set at 25% resulting in a valuation of $0.54 per share. One
hundred thousand shares were issued in late September 2001. The Company's stock
was trading in the range of $0.28 to $0.43 with a five-day average of $0.36 pr
share. The discount allowed was set at 25% resulting in a valuation of $0.27 per
share.

In December 2001 the Company agreed to issue up to 5,000,000 shares of common
stock in an offering to be conducted outside the United States. As of December
31, 2002 an aggregate of 5,016,508 shares of common stock had been issued with
the Company receiving net proceeds of $1,194,000 or $.24 per share. In July 2002
the Company agreed to issue up to 7,500,000 shares of common stock in an
offering to be conducted outside the United States. As of December 31, 2002 an
aggregate of 7,033,242 shares of common stock had been issued and the Company
had received net proceeds of $327,000 or $.05 per share. As of December 31, 2002
the bid price for the Company's common stock was approximately $.06 per share.

                                      F-15
<PAGE>

NOTE 4 - NOTES PAYABLE

Itec entered into an agreement with Glenwood Marketing Associates, Inc., (GMA)
effective April 25, 2000 whereby GMA agreed to lend $1,100,000 to Itec. From the
$1,100,000 loan Itec agreed to pay $200,000 of capital formation fees to GMA.
These fees were expensed in the year incurred.

The loan bears interest at 10% per annum payable in monthly interest only
payments for the 36-month term of the loan. Itec agreed to amend its articles of
incorporation so as to allow the issuance of a preemptive and preferential right
to purchase shares pursuant to Board of Director approval. The Company agreed to
promulgate a Board resolution to convey to GMA 20% of the Company's issued and
outstanding common stock and further that Board shall vest GMA with preferential
rights to acquire additional shares, at no cost to GMA, when additional shares
are issued, so as to maintain GMA's stock ownership position at 20% of the
issued and outstanding common stock. GMA's interest shall be non-diluted, except
that this provision shall not apply if the Company's common stock becomes
publicly traded.

The Company agreed, pursuant to this agreement, to pay GMA a $20,000 per month
consulting fee for 24 months, to allow GMA to appoint one member of the
Company's Board and to grant GMA a first right of refusal on leasing of all
machines built by the manufacturer of the equipment related to the license
agreement.

According to the terms of the agreement, the Company will become publicly traded
within twelve months of the loan agreement at which time all the officers and
directors of the Company will agree to a two year lock up of their Company
stock, GMA agreed to convert the debt to preferred stock upon Itec becoming a
public company. The preferred stock will contain provisions for redemption
suitable to both parties. The Company also agreed that at least two of the
Company's Board members would approve verbally any Company expenditure of more
than $5,000.

The Company has also conveyed a covenant, so long as GMA acts in accordance with
the terms of the agreement, to hold GMA harmless from any and all claims that
may accrue and to indemnify and hold GMA harmless from any and all losses,
claims, liabilities and expenses, including reasonable costs of investigation,
counsel fees and disbursements, which may be imposed upon or incurred by GMA
with the conduct of its own business with the Company.


NOTE 5 - LEASES

Effective April 2001 the Company entered into a lease agreement for office
facilities in California. Under terms of the lease, the Company agreed to pay
monthly lease payments of $900 for 36 months. Future minimum rentals under this
operating sub-lease are as follows:

                    Year Ending December 31,
                            2003                             10,800
                            2004                              3,600
                                                       ------------
                            Total                      $     17,100
                                                       ============

                                      F-16
<PAGE>

NOTE 6 - TECHNOLOGY LICENSE

Effective June 30, 2000, the Company entered into a five-year patent license
agreement with Honeywell International, Inc. (Honeywell) whereby the Company
obtained a non-exclusive, nontransferable worldwide license to practice the
methods and to make, use, and sell, the products and/or covered by the
proprietary rights limited to the field of use of separating and recovering
motor oil from high density polyethylene plastic. Under the terms of the
agreement the Company agreed to pay a $50,000 non-refundable initial license fee
and an additional minimum annual royalty commencing upon delivery of the first
equipment to an Itec customer, of the greater of $50,000 or 5% of the gross
sales of all products sold and services sold in the United States and 3% of the
products or services sold in countries other than the United States. The initial
license fee of $50,000 is not creditable toward the minimum annual royalty and
was payable in three equal installments. The first was due upon the execution of
the contract, the second on December 1, 2001 and the third on April 1, 2001. At
March 31, 2002, $33,333 was accrued as a liability.

On April 25, 2001, Honeywell revised the payment schedule to reflect the updated
delivery schedule so that the previous December 1, 2001 payment is now due May
30, 2002 and the final payment due December 31, 2003. As of March 31, 2002, the
$16,667 paid and the additional $33,333 accrued have been accounted for as
prepaid expenses based upon the revised agreement whereby these amounts apply
only upon shipment of the first equipment systems. The amounts are not
refundable and will be expensed upon shipment. This agreement shall
automatically renew for additional one-year periods after the end of the initial
five-year term unless written notice is given by either party of its intent to
terminate the agreement. Honeywell may terminate this agreement in the event of
bankruptcy or insolvency of the Company, an assignment for the benefit of
creditors of the Company, the nationalization of the industry which encompasses
any products or services, any suspension of payments under the terms of the
agreement by government regulation, the Company's failure to commence
manufacture of the agreement, a substantial change in ownership of the Company
(whether resulting from merger, acquisition, consolidation or otherwise),
another company or person acquiring control of the Company, or the existence of
a state of war between the United States and any country where the Company has a
license to manufacture products of services. In addition, if either party to the
agreement defaults for any reason in any of the obligations under the terms of
the agreement, the other party will have the right to terminate the agreement by
giving at least 60 days written notice.

There are no rights to sub-license granted under the terms of this agreement.
The Company has agreed to invest in the commercial development of the technology
and market for the product by committing resources at minimum in accordance with
various requirements as set forth in the commercialization plan provided by the
Company for consideration to Honeywell when the Company applied for the license.
The terms of the agreement require the Company to observe all applicable United
States and foreign laws, regulations, rules, and decrees with respect to the
transfer of the proprietary rights and related technical data to foreign
countries and failure to conform to such laws, regulations, rules and decrees
may result in criminal liability.

                                      F-17

<PAGE>

NOTE 6 - TECHNOLOGY LICENSE, Continued

The $50,000 license fee is recorded as an intangible asset and is being
amortized over the five-year initial term of the license agreement on a
straight-line basis. Management's policy with respect to long-lived assets,
including intangible assets, is to periodically review the carrying amounts, at
least annually, to determine if there is any impairment in the carrying value.
As of December 31, 2002, management believes that there is no impairment in the
carrying value of any of its long-lived assets.


NOTE 8 -  RECEIVABLE RELATED PARTY

On July 5, 2000 the Company's Board of Directors approved and authorized the
Company to make a loan of $250,000 to the Company's President. The loan,
according to the minutes of the Board meeting, is interest only for ten years
with the total principal due at the end of ten years. Interest of $9,479 and
$18,958 has been waived in the years ended December 31, 2001 and 2002
respectively by the board of directors. As of December 31, 2002, $236,973 was
advanced on the loan.


NOTE 9 - AGREEMENT

The Company has entered into an agreement with Cesmet Laboratories SRL, an
Italian company for a cooperative effort in development of the General Plastic
Development Program (GPDP) and the oversight of Itec's Italian operations. The
fees for this agreement are on a time and expense basis billed monthly. A
director of the Company is a 50% owner of Cesmet Laboratories, SRL.


NOTE 10 - SUBSIDIARY

On April 11, 2001, Itec formed a wholly owned subsidiary and incorporated it as
a Delaware corporation known as EC02 Environmental Systems. The only activity to
date was the registration of a trademark for EC02.


                                      F-18

<PAGE>


NOTE 11 - SUBSEQUENT EVENTS

In early 2003 the Company filed a lawsuit against Fedegari Autoklavi A.G. for
fraud, breach of contract and unfair business practices. This legal proceeding
was filed in California Superior Court for Stanislaus County.

In January 2003 Itec leased a 6,900 square ft. industrial building to set up the
ECO2 cleaning system. This location will serve as both a testing and
demonstration site. Itec moved its corporate office to this location in February
2003.



                                      F-19